Gauge Proposal Template:
• Website: https://www.inverse.finance
• Documentation ABOUT INVERSE - Inverse Finance
• Transparency: Inverse Finance - Transparency Overview
• Github Page: Inverse Finance · GitHub
• Communities: Inverse.finance
• Defillama: Inverse Finance Page
Inverse Finance is a decentralized autonomous organization that develops and manages a suite of permissionless and decentralized financial products using blockchain smart contract technology. Originally founded by Nour Haridy in late 2020, the protocol is now governed by Inverse Finance DAO, a collective of crypto enthusiasts. Our code base is open source and maintained by the community.
Inverse Finance’s main products are:
- FiRM, a fixed-rate lending market
- DOLA, a stablecoin pegged to the US Dollar
- DBR, a new DeFi primitive that enables holders to service a DOLA loan on FiRM.
This proposal aims to add the TricryptoINV pool to the Curve Gauge Controller, a pool made up of INV, WETH and USDC. The motivation behind this addition is to leverage the new Curve LP for the INV price_oracle, which will be utilized on FiRM. By including this pool in the Curve ecosystem, we aim to deepen liquidity, increase trading volume, and provide a more efficient trading experience for INV token holders.
At present, a considerable portion of INV trading volume occurs off-chain on centralized exchanges such as Coinbase. Currently, the majority of INV liquidity paired directly with WETH or ETH is on Uniswap V2. However, by migrating this liquidity to the Curve and providing incentives to LPs, we anticipate a significant increase in TVL. The advanced AMM mechanics offered by Curve, combined with the drive for greater TVL, are expected to drive a substantial increase in trading volume for the INV-WETH-USDC pair compared to its current volume on Uniswap. By establishing a deep Curve INV-WETH-USDC pool, we aim to redirect the majority of trading volume back on-chain.
Decisions for the DAO are made by using INV in the Governor Mills voting contract but as it takes a minimum of five days to vote through a proposal, Inverse Finance DAO has delegated decision-making power to several working groups with limited autonomy and budget. The scope of these working groups is determined in their proposals and they exist to meet fast moving market conditions, to transfer specific or minor decisions to relieve token voters from information overload, and to create a reliable and enjoyable work environment.
Working groups are held accountable to DAO governance, are required to produce progress reports and periodically apply for budget renewals. Delegates have insight into all discord conversations and working groups can be altered or disbanded by a DAO vote.
The Fixed Rate Market or “FiRM,” is Inverse Finance’s Fixed Rate Market lending protocol. FiRM makes use of Chainlink price oracles or Curve’s ema, depending on the market, in combination with our native Pessimistic Price Oracle (PPO). This novel approach to price oracles for borrows and liquidations in FiRM uses the lower of two recorded prices: either a) the current collateral price on the oracle feed, or b) the 48-hour low price as observed by the PPO on the oracle feed, divided by the collateral factor. For example, if the current Chainlink price for wETH is $1,500, the 48-hour low was $1,000 and the collateral factor is 80%, the PPO returns $1,250. ($1,000 / .80 = $1,250)
Inverse Finance has undergone multiple audits in recent months, including the likes of Nomoi, Peckshield and DeFiMoon. Inverse has also hosted a bug bounty contest on Code4rena to conduct a comprehensive audit of FiRM, and has an active bug bounty program live on Hats Finance. All relevant audit information can be found here. The DAO also has dedicated members overseeing risk, what we call the Risk Working Group.
- Centralization vectors:
Within the DAO working groups have been formed to deliver work in specific areas. Often, these working groups will have a Multisig wallet that the DAO governance awards certain roles and limited treasury asset allowances in order to carry out required work. All granted privileges and allowances can be reclaimed/disabled by INV token controlled governance. These are:
- Treasury Working Group (TWG): 3 of 4 Multisig with allowances giving access to Treasury funds to optimize treasury management.
- Risk Working Group (RWG): 1 of 3 Multisig with privileges to pause actions in our (now disabled) lending market.
- Policy Committee (PC): 5 of 9 Multisig that can change staking reward rate to INV stakers.
- Fed Chair: 2 of 7 Multisig that can call the expansion and contraction functions (to mint/burn DOLA) on the Fed Contracts.
Please see our Multisig Wallet section of the transparency portal here.
- Market History:
As an unpegged asset, the INV token experiences volatility day to day.
TricryptoINV is a very new pool on curve, so has little volume and TVL so far.
Daily volume (30-day average) is $221,831 (Source: CoinGecko)