Proposal to add XSTUSD-3CRV to the Gauge Controller

Gauge Proposal Template:

Summary:
Proposal to add the XSTUSD/3CRV pool to the Gauge controller to enable users to assign a gauge weight and mint CRV.

Describe what this proposal is about
This proposal is aimed at adding XSTUSD-3CRV to the gauge controller.
This way XSTUSD, the algorithmic stablecoin of SORA and Polkadot & Kusama can play a more significant role on Curve and add value to it’s community.

References/Useful links:
Website: https://sora.org/
Documentation: SORA Network - SORA
Github Page: SORA · GitHub
Communities: - Twitter: https://twitter.com/sora_xor - Telegram: Telegram: Contact @sora_xor
Audit: Nettitude audit Polkaswap XSTUSD - Google Docs

Protocol Description:
SORA is a new economic system aimed at creating a supranational, decentralized central bank with built-in tools for DeFi. The SORA network implements a new way of parachain architecture on Polkadot and Kusama network, with the external bridges.

XSTs are the synthetic assets for the SORA ecosystem. Unlike other synthetix which are backed by some collateral token, XST is backed by the special liquidity source of XOR.
XST is minted by burning XOR, which will mint XST through a liquidity source built in to Polkaswap. XSTUSD is an algorithmic stablecoin pegged to the USD through the value of DAI.
A single XSTUSD is a claim for 1 US$ worth of XOR, and not a claim for actual US$.
More information on XSTUSD is available in the following links:

Describe the proposed asset(s), the corresponding protocol(s), and historic prices of the token (price must come from the source of highest liquidity).

Motivation:
Thanks to a combination of XSTUSD’s unique liquidity source that requires XOR to be burnt in order to mint XST, this stablecoin is at a unique advantage in the Polkadot & Kusama space as SORA recently secured a Kusama parachain. With Parity’s ongoing work to set up a KSM-DOT bridge progressing smoothly, the bases are set for XSTUSD to propagate.

It is important to note that $1 of XSTUSD is equivalent to $1 worth of XOR and as an algorithmic stablecoin there is no overcollaterization for minting, additionally, there is no additional protocol fee to to swap XSTUSD for XOR.

The motivation to add a gauge on Curve is to increase the demand and establish an additional use for XSTUSD, the cross-chain algorithmic stablecoin. This would positively impact Polkaswap as it’s liquidity source, and the subsequent DOTSAMA ecosystem through the parachain and bridge. The current XSTUSD Curve pool is a result of a development proposal that the SORA community voted, which approved $600,000 of bribes for Votium over the span of 4 months. You can find the approved proposal here.
These are the key motivations to participate for a gauge, as we believe this would benefit the Curve community, the entire SORA community, as well as the Polkadot & Kusama space.

Explain why this pool needs incentivization

Specifications:

Please answer in a short and clear manner.

  1. Governance: Provide current information on the protocol’s governance structure. Provide links to any admin and/or multisig addresses, and describe the powers afforded to these addresses. If there are plans to change the governance system in the future, please explain.

    XSTUSD governance is managed by the SORA Governance system.

Currently on-chain voting with XOR tokens is used, which is the same method for democracy as in Kusama and Polkadot. However, in the future the SORA Parliament will take over decision making like this, using random sortition to choose subsets of decision makers.

  1. Oracles: Does the protocol rely on external oracles? If so, provide details about the oracles and their implementation in the protocol.

    The protocol relies on it’s in-house developed oracles called SORAcles. These will be finished in May 2022
    SORA Oracles Proposal md by WRRicht3r · Pull Request #33 · sora-xor/rfps · GitHub

  2. Audits: Provide links to audit reports and any relevant details about security practices.

Done by Nettitute on 20th of February 2022.

  1. Centralization vectors: Is there any component of the protocol that has centralization vectors? E.g. if only 1 dev manages the project, that is a centralized vector. If price oracles need to be updated by a bot, that is a centralized vector. If liquidations are done by the protocol, that is also a centralization vector.

XSTUSD gets it’s price data from the XOR-DAI price, so there is nothing that needs updating by humans; it’s all on-chain.

  1. Market History: Has the asset observed severe volatility? In the case of stablecoins, has it depegged? In the case of an unpegged asset, have there been extreme price change events in the past? Provide specific information about the Curve pool: how long has it been active, TVL, historical volume?

XSTUSD has an increasing quality of peg since it’s launch in October 2021.
Curve pool: Curve.fi active since October 2021.
TVL: $ 1.4 Million
Historic volume: -
Exchange rate XSTUSD/DAI incl fees: 0.9883

9 Likes

I heard more XST will follow soon, this will be pretty big. It’s similar to UST and LUNA. Cool to have them on Curve already

7 Likes

XSTUSD is one of the easiest to use stable coins and the utility will only go up from here. I fully support adding it to the Gauge.

6 Likes

This proposal looks great! The links are very thorough as well! I have no further questions except when do we vote?
I am very interested in other iterations of XST!

6 Likes

Definitely support this initiative.

5 Likes

Do Quon is smart backing UST with Bitcoin. Makoto is genious backing XSTUSD with XOR that is backed by a basket of synthetic assets.

5 Likes

XOR and XST is similar to LUNA and UST, but:
XST will have much more synthetic assets than just US dollar
XOR has an eye-opening economic and democratic design and utility for anyone who studies it

Having them in Curve will mean a lot of demand and liquidity for both ecosystems

5 Likes

$XST will be the better and more decentralized $UST, it’s backed by the ultimate reserve currency $xor TBC liquidity which people say OlympusDao is a worse copy of Sora.

lets having $xst on curve

5 Likes

After reading the documentation regarding XST assets & XSTUSD in particular I’m convinced this will be a game-changer in the stablecoin space UST.2.0. Makoto and the team at Soramitsu (contributed to SORA project) have really thought long and hard about the architecture behind XST assets. Just a matter of time IMHO before the rest of the crypto space catches on to this masterpiece.

4 Likes

Super stoked to is other XST assets like XSTKSM & XSTDOT before the bridge goes live.

4 Likes

I only trust stablecoins with fortified backings. $XSTUSDs use of $XOR token bonding curve looks like a better alternative to $UST. With more synthetics in the making I believe $XSTUSD will be the go to stable. I fully support this proposal.

4 Likes
3 Likes

Full support for Sora.

3 Likes

How is this proposal coming along? When voting?

1 Like

Gauge vote was placed yesterday in Curve

2 Likes

https://dao.curve.fi/vote/ownership/175

2 Likes

Could you provide some more details about the liquidity in the DEX please? Also, what price is used here: spot price? time weighted average price? How many operators report the price for XOR-XSTUSD redemptions/swaps?

2 Likes

That audit report looks extremely incomplete. It found zero security vulnerabilities: that’s already a huge red flag for me. That’s an extremely rare event and happens rarely for the best auditors (ChainSecurity had it once in their entire career maybe).

The documentation for XSTUSD basically doesn’t exist (technical docs). The product has so much opacity around it, that I cannot with good conscience endorse this project.

It doesn’t matter if you have a 100+ FTE organisation with 6 years of experience or something. Just show us the technical implementation, good audits and good oracles, good arbitrage mechanism, good volumes, due diligence on bridge risk and it becomes a more approachable gauge proposal.

2 Likes

Trading data for the Polkaswap DEX is shown here: Pairs — CeresToken.io

The price rate used for XSTUSD is the XOR-DAI price on Polkaswap. It is averaged over 30 blocks, with a maximum rate of change per block of 0.197% upwards and 0.007% downwards. The value of XSTUSD is guaranteed by minting XOR at the calculated XOR-DAI rate, so it will always return tokens at the value of the stable coin at the current rate, without slippage. In other words, XSTUSD is not bounded by the pool liquidity, but at least for exiting to XOR has infinite liquidity.

Because the XOR-DAI rate is internal to Polkaswap, there are no oracle operators reporting the price, as it is built into the system.

1 Like

The auditor (Nettitude) is well-known in the enterprise space and we met them originally through our work with the Linux Foundation. The audit was done for the curve gauge proposal, about 3 months after XSTUSD went into production, so it would have been quite bad if there had been any exploits. The code itself was tested for 4 months before release, including on our public testnet.

I’m happy to share the source code or walk through it in a call if you like. We just don’t want to make everything public ATM because we don’t want competitors to copy all our work and also we are in the midst of refactor other parts of the system to work with our parachain (not related to XSTUSD, but we use Substrate and Substrate pallets to implement the functionality).

Just drop an email to t@soramitsu.co.jp if you want me to walk you through the source and how the stable coin works.

1 Like