Why does transparent execution of DAO votes matter? How do we do it at Alluo?
Alluo has just gone through our first governance (see our blog announcing its launch here).
The results were somewhat unexpected and not what the Core Contributors had indicated they would vote for (see my tweet here), but this is what democratic governance looks like!
This is also a flavour of things to come where protocols will buy the $ALLUO token to direct liquidity to their venues.
How many $ALLUO tokens should be minted to reward Lockers for Week 1–07/03/2022 to 13/03/2022
Result: 1000 with 16K ALLUO, which is 41.17%
The first result was executed directly on-chain via the multisig wallet controlled by two core contributors in these two transactions:
- Minting enough $ALLUO token for a few weeks of reward emittance to the vlAlluo.sol contract (link here)
- Setting of the reward schedule of 1,000 $ALLUO per week (link here)
This is relatively straightforward and transparent. All lockers are now able to enjoy that sweet staking on https://app.alluo.finance
Liquidity Direction: Week 1–07/03/2022 to 13/03/2022
Result:
1. Curve/Convex: d3Pool with 124K ALLUO, which is 44.52%
2. Curve/Convex: wormhole v2 UST with 106K ALLUO, which is 38.09%
3. Curve/Convex: mim with 49K ALLUO, which is 17.39%
This is much more complicated to implement in a transparent, decentralised, and economical fashion. Alluo's deposits (via either our non-custodial Mobile app or anonymous crypto-friendly Dapp) are held in any of 4 stable coins, which are then invested in Curve and Convex. Whilst Curve’s factory system is great in allowing teams to build their own pools, it has created a certain level of complexity given that each Curve pool’s implementation is slightly different.
All these layers of complexity make it quite hard for a Smart Contract to execute these votes in an autonomous and systematic manner — in a way that can be reliably tested and exercised without the involvement of human beings clicking on buttons, this is what happens when centralised protocols do that, for instance when Celsius lost $54m interacting with BadgerDao’s front-end which had been compromised https://www.fxempire.com/news/article/celsius-network-lost-54-million-in-badgerdao-833638).
The promise of a trustless, decentralized, democratic liquidity management protocol
Alluo and its Core Team are committed to decentralization; we have therefore spent the last few weeks building a series of building blocks allowing us to transparently and cost-effectively execute our community's votes.
We ran a transaction with all the money invested in the protocol today (over 500K $USDC) on Ethereum mainnet, executing our Community vote, all in one transaction; see link here.
This is a pretty complex transaction; here is a quick explainer step by step with references to our smart contract:
Step 1
Convert 45% (44.52% rounded up) $USDC (our reserve stable) to $FRAX via $3CRV to maximise liquidity (see our blog about our Exchange.sol here)
Step 2
Invest this FRAX into the Curve d3pool (approval and transfer)
Step 4
Invest the Curve LP of d3pool into Convex d3pool compounder (approval and transfer)
Repeat
These four steps need to be repeated for every investment strategy, with potentially a different reserve coin, different entry coin into other pools in Curve and different pools in convex.
Today, Alluo can execute all these steps automatically for any number or combination of Curve/Convex pools. This is the first step; soon, we will expand this to other Strategies (Harvest Finance, Anchor, etc.) and assets (e.g. the staked eth pools on curve/convex).
The voteExecutor.sol is the first building block towards the full automation of our protocol. Today, voteExecutor.sol is still called manually by a Core Contributor after the vote results are in; very soon, we are planning to link it directly to Snapshot and therefore fully automate the processes, achieving true trustlessness 🎉
Open Sourcing
With this first execution, we have also open-sourced some of our Github repos; this is still very much a WIP. However, we welcome community contributors, reviews and opinions:
- Exchange and its components: https://github.com/GetAlluo/alluo-exchange
- Investment Strategies & Vote Executor: https://github.com/GetAlluo/alluo-strategies
With this open sourcing, we are working on a bug bounty program that will start Monday 14th March 2022.
We are very excited to execute these votes, build a track record and prove that cross-chain liquidity management can be community-driven and trustless. In parallel with our mobile app (Android / iOS), we keep striving to bring DeFi to the masses in a user-friendly non-custodial way!
