Whitelist the Frax Curve AMO Contract

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Summary:

This proposal is to whitelist the Frax Curve AMO contract in Curve’s “SmartWalletWhitelist” contract allowing Frax’s Curve AMO to participate in Curve governance, lock CRV and provide a boost on the Frax Curve AMO contract. The Frax Curve AMO will always lock any earned CRV for 4 years and continuously re-lock for the maximum amount of time. The contract will not sell any CRV earned and will continuously lock CRV for the maximum amount of time.

More information on Frax and the Frax Curve AMO can be found here.

Abstract:

• The Frax Curve AMO uses protocol-controlled assets to provide liquidity to the Curve Frax-3pool.

• Whitelisting the Frax Curve AMO will allow the Frax community to participate in Curve governance and act as a token sink for any CRV the AMO earns. The FRAX community plans to begin by purchasing $1mm of CRV and locking it for 4 years in the contract.

• All CRV earned by the AMO will be locked for the maximum amount of time and be relocked continuously. No CRV will be sold.

Motivation:

The Curve Frax-3pool and Frax Curve AMO have become core components within the Frax protocol. Both were significant factors in Frax’s performance through the recent market contraction. Whitelisting the AMO contract will allow Frax to lock CRV, attract additional liquidity to the pool, and participate in Curve governance. Whitelisting will also allow Frax to lock all existing CRV in its treasury. For CRV holders, whitelisting the Frax Curve AMO will create another CRV sink, with all CRV earned being permanently locked by the AMO contract. It should drive additional volume and fees to CRV holders and decentralize Curve DAO governance in the long term.

The Frax community is currently advancing a proposal to use $1mm of protocol controlled funds to purchase CRV on the open market and then lock it for veCRV for 4 years. The whitelisting is necessary for Frax to lock the CRV using the Frax Curve AMO contract.

Whitelisting the Frax Curve AMO will also be symbiotic with Yearn and benefit the broader Curve community. Frax is currently one of the largest users of crvFRAX and will not curtail any deposits or usage of Yearn if whitelisted. Directing a portion of future demand into the whitelisted contract will benefit both Frax and Yearn by increasing their respective boosts. If Yearn is the single largest LP by a wide margin, the Yearn boost is penalized due to the Curve pool boost calculations. Creating an additional whitelisted contract in the pool will lead to a higher boost for the contracts and provide the Curve community with a greater degree of decentralization.

Specification:

The Curve DAO needs to execute the following function on SmartWalletWhitelist to approve the FRAX Curve AMO contract:

approveWallet(0x72170Cdc48C33a6AE6B3E83CD387ca3Fb9105da2)

Notes:
• Frax recently completed an audit with Trail of Bits. There were no critical findings. The final report is forthcoming. Frax previously completed an audit with Certik.

For:

This proposal will likely create additional volume, TVL and fees for Curve and veCRV. It will also create a CRV sink for all CRV earned by the Frax Curve AMO. Over time, it could contribute to the decentralization of veCRV and expands collaboration between the Curve and Frax communities.

Against:

Whitelisting the Frax Curve AMO will likely lead to additional liquidity in the Frax-3pool.

Poll:

This will be updated with the poll link once the vote is live.

[Mark11]

Such a great protocol - 100% support this proposal!

[tg1]

great idea, make it happen!

[cryptoandre1]

This proposal would benefit both protocols. I support the proposal.

[C2tP]

This seems highly unnecessary.

The main point of this is “we want to be able to boost our own pool”.

Refering to yearn boost strength balance, there are three protocols that can be leveraged to maintain an optimal balance in boost.
If yearn’s boost isnt enough, just add more vecrv to yearn? or use the other platforms too? Stakedao doesnt have a frax pool right now, why dont you work with them to add one there?

If this balance is an actual real issue for the frax amo, it sounds like very minimal effort has been put in to rectify it.

“CRV sink” is a bit of a distraction since there are all the other platforms you could put the CRV to work with. This isn’t a “platform-wide” service/proposal for the betterment of Curve as a whole. It’s literally just a “lets make frax pool big” grab.

[WormholeOracle]

It’s great that there are now several options available to boost liquidity on Curve and put CRV to use, but I can see these are maybe not satisfactory solutions for DAOs.

They may not want to assume additional risk of going through a yield aggregator. They may not want to give up ownership of their CRV and the voting right that comes with it. They may not want a middleman siphoning profit if they have the option to earn yield directly from the source.

I’d like to see a diversity of whitelisted organizations with different scopes and goals, as I see the future of Curve governance being dominated by large organizations. I’m concerned that if we try to be too restrictive of which orgs suit us for whitelisting, we will find to our detriment that a small oligarchy controls the protocol.

[C2tP]

expanding platforms that service the curve platform as a whole is fine. this one services one gauge. there’s a pretty big difference

[Mark11]

This doesn’t make much sense - if a DAO wants to increase its gauge by buying and locking tokens that benefits all CRV holders and the protocol by increasing the value of Curve. This is just allowing a DAO to do something that any private company or individual can do from a hot wallet. We shouldn’t put a road block against DAO that by the very act of engaging this facility - by market buying of CRV for locking - will be inextricably aligned with the success of Curve.

FRAX is a known entity with well intentioned and public team - they are being transparent in the purpose of their request and why this change is required for them to execute their goal of increasing the gauge weight. By carrying it out they would be making a bet on Curve and its future success.

It would be good to have a such a team involved in the governance of Curve and with the locked CRV will be aligned with its success. Frax are planning big things and this is a great way to ensure that the good of Curve will always have elevated consideration in their design, rollout and execution.

[WormholeOracle]

I agree, the purpose of the whitelisting is to ensure the contract cant be used maliciously. It isn’t so we can make judgements about whether a DAO is good for Curve or not. Whitelisting is a technical limitation and I hope there can be a solution to make DAO integration permissionless in the future.

[Mark11]

@WormholeOracle is right - the purpose of the whitelist is to stop abuse not lock out DAO’s from what we allow any other individuals and organizations to do.

@C2tP if we want the threshold criteria for participation in gauge voting to be that such action has to “service the platform as a whole” then we should put that to a vote to prevent all veCRV holder from single gauge voting - which I am sure you agree would be a ridiculous outcome.

Blocking the proposal otherwise would just be to manipulate the original purpose of whitelisting to simply block the FRAX DAO from participating in gauge boosting that we permit any other veCRV holder to engage in.

The likely outcome of blocking their participation will be that
a) they simply use a team wallet to avoid the whitelisting roadblock exposing the DAO members to further risks because we blocked it or
b) they will simply not proceed with it and moving forward be less aligned with the success of Curve - shooting ourselves in the foot.

When you get down to it there isn’t any good reason to block this proposal. It should be passed.

[cryptoandre1]

Any updates on this proposal?

[imshmidt]

no activity. check @Mark11 has 2 sentences, at first he says proposal is good, wit next message he says that it makes no sense.

[Mark11]

@imshmidt I was responding to @c2tp above my post - saying his argument against the proposal is non-sensical