Proposal to Kill ApeUSD/FraxBP Gauge

Summary:

Kill CRV emissions for ApeUSD/FraxBP gauge by calling set_killed().

References/Useful Links:

Motivation:

The Crypto Risk team has been looking into ApeUSD and recently released the report linked above. The report raises concerns about the ApeFi protocol and asserts that it does not meet, nor has it ever met, the criteria necessary to have a Curve gauge. A recap of the questions Crypto Risk investigates:

  1. Is it possible for a single entity to rug its users?
  2. If the team vanishes, can the project continue?
  3. Do audits reveal any concerning signs?

The findings in the report conclude that ApeFi places a significant amount of trust in an anonymous team that may only be composed of one or two individuals. Crypto Risk has reached out to the team in an attempt to bring ApeFi’s security practices up to an acceptable level. Response on the part of the ApeFi team has been unproductive, prompting this proposal to kill the gauge.

The gauge vote was bundled along with gauges for sUSD, LUSD, GUSD, BUSD, alUSD, USDD, and TUSD /FraxBP pairs. We strongly urge DAO voters to vote against bundled gauge votes in the future. Bundled gauge votes make it difficult for voters to properly vet each protocol receiving a gauge and increase the likelihood that a low-quality or malicious protocol will receive a gauge. It is likely that, had ApeUSD been up for vote singly, the DAO would not have allowed it to receive CRV emissions.

For:

Halt CRV emissions for ApeUSD/FraxBP gauge

Against:

Do not halt CRV emissions for ApeUSD/FraxBP gauge

6 Likes

Can’t 1) be mitigated significantly by the apeFI team simply time-locking a significant protion of the crvLP tokens into frax.convexfinance?

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1 Like

No. If you read the assessment, which I encourage you to do so, the risk arises from the multisig having an inordinate amount of control (including upgrading the smart contracts) and having unknown owners.

1 Like

Ok I read it.

Lots of projects on curve have anon teams. and upgradeable contracts. Don’t they? Is 1 day time lock not enough?

If ApeFi is able to depositAndStake so much, doesnt that mean there are people with FRAXBP tokens that are willing to “back” those apeUSD with their stablecoins?

If apeFI were to lock their crvLP tokens in frax.convex i dont see how they could rug? they wouldn’t be able to unstake the LPs to then withdraw the rightside tokens from the LP.

Are they able to mint() apeUSD unbacked and hand them to any EOA wallet to swap() through the pool? i don;t think so, but would like to verify this.

based on the need for the MSIg to run the stabilizer, i would have to say no, at current TVL.

Essentially, the $ApeUSD stability is fully controlled by Ape Finance multi-sig

This is both good and bad. Bad that it’s not algo, but good that its being done. all the cefi USDs are done the same way, but they are run by large dox teams.

I did ask the AC about the collateral and am told they are exploring alternative collaterals to increase those options, but i have also seen, with more and more collateral choices the risk of exploitation, and bad debt grows too.

The lack of trading volume is obv not good for veCRV holders. but again…there are a lot of pools on curve than have similar TVol specs. Is this (i dont know) drastically underperforming the other low TVol pools?

I don’t personally hold any APE, nor have I minted any apeUSD, but i have been farming this with rightside tokens, so I do hope that clarity on this is acheived

Added after further thought. {edits}

Even USDC can be painted as failing to meet the 3 req’s listed above with their centralized ability to freeze tokens.

There is also a lot of the undertones of “you” protecting “me” here, which many dislike about TradFi, in this proposal. Shouldn’t I have the right on my own to decide to trust my funds to this collection of contracts.

Propose that veCRV don’t vote on that gauge is a different matter. Propose that a guage be closed if it consistantly doesn’t get votes, perhaps. mind you that would just be a waste of gas.

4 Likes