Summary:
Proposal to add VST/FRAX Factory Pool to the Gauge Controller to enable users to assign gauge weight and mint CRV.
VST is a crypto-backed stablecoin. This proposal is submitted jointly by Vesta Finance and Frax Finance. It is in Vesta and Frax’s interest to promote deep liquidity for VST and FRAX on Arbitrum in order to advance the stablecoin ecosystem of Arbitrum.
References/Useful links:
Website: http://vestafinance.xyz/
Token Address: Vesta Stable (VST) Token Tracker | Arbiscan
Twitter: https://twitter.com/vestafinance
Medium: Vesta Finance – Medium
Community: Vesta Finance
GitHub: https://github.com/vesta-finance/
Protocol Description:
VST is an ERC20 token issued by Vesta. Users may collateralize a wide variety of collaterals. For now, the types of collaterals supported at Vesta include ETH, renBTC, and gOHM. The supported collaterals will increase overtime as Vesta ramps up on its partnership effort with other protocols in the Arbitrum ecosystem. Vesta is a L2-first project and has been one of the first native lending protocols live on the Arbitrum mainnet. VST aims to become one of the cornerstone stablecoins for trading on L2s.
VST’s price history is tracked on CoinGecko. Historically, VST has kept its peg true to the dollar. Vesta’s redemption feature serves as VST’s price floor as users can always redeem VST for the underlying collateral, and the collateralization ratio of 110% on ETH serves as a price ceiling. These two mechanisms ensure VST’s peg to the dollar.
The pool previously reached $30M TVL, and currently sits at $24M TVL. It is one of the deepest liquidity pools on Arbitrum Curve.
The team is filled with DeFi veterans, with many strong advisors - including 0xMaki, DCF God, and Not3Lau Capital. Many of our angels and advisors will divert their CVX/CRV votes into the VST/FRAX pool to promote future incentivization and signal commitment to the Convex/Curve community.
Motivation:
Curve is the cornerstone of VST adoption. With this pool set up for a gauge, an incentivized inclusion on Curve provides visibility to VST and brings a mature ecosystem with existing integrations to other protocols. Curve incentivization would help deepen the liquidity of VST and help it reach critical mass to become a widely-adopted stablecoin.
Specifications:
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Governance: The VST token contract was deployed by Vesta and its current “Owner” role is the Vesta governance multisig wallet on Arbitrum: 0x4A4651B31d747D1DdbDDADCF1b1E24a5f6dcc7b0. The multisig is consisted of four people: 0xMaki, Darren Lau, Mikey Milken (Vesta core contributor), 0xAtum (Vesta core contributor). We plan to formalize the governance structure within weeks.
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Oracles: Vesta uses Chainlink price feed to get the prices of the collaterals. We aim to create pools other than VST-FRAX down the line so there can be a Chainlink oracle for VST eventually.
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Audits: Vesta’s current technical implementation is largely based off of that of Liquity’s. You may see a summary of audits here.
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Centralization vectors: Vesta’s governance multi-sig has the right to modify the lending protocol’s parameters, such as minting fee, liquidation ratio, etc. This set up allows the Vesta core contributors to have maximum flexibility, ensuring that they are in-line with market demand. We do plan to bring parameter modification on-chain. Liquidations of the protocol can be done by anyone willing to call the liquidate function and so it is not centralized.
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Market History: The VST token has not experienced significant volatility or depegging against the US dollar due to its redeemability. The VST-FRAX pool has been active since Feb 9, 2022 and currently holds approximately $24M TVL on the VST-FRAX pool.
