EGP#: 30

Title: Hyperdrive Mainnet Launch & Security Monitoring and Incident Management Services

Author(s): @DELV

Type: Element DAO Service Provider Proposal 

Status: Proposed

Date Proposed: 2024-06-19

Date Ratified: <yyyy-mm-dd>

References

• EGP-29: Hyperdrive Public Testnet Implementation for Element DAO

• Hyperdrive Testnet

• Hyperdrive Testnet Analytics Dashboard

• Hyperdrive Whitepaper

• Hyperdrive Documentation Portal

• Hyperdrive Security Reports

Sentence Summary

EGP-30 proposes that the Element DAO engages DELV as a service provider to deploy an instance of Hyperdrive (and Hyperdrive pools) on Ethereum Mainnet, to add stETH and sDAI yield sources, and to support/monitor the security of the deployed Hyperdrive instances over a 90-day duration.

Paragraph Summary

This proposal includes details for the following service provision milestones:

1. Deployment of an Element DAO instance of the Hyperdrive protocol and 6-month pool deployments for stETH and sDAI to Ethereum Mainnet.

2. For 90 days, security monitoring and incident management of the Element DAO instance of the Hyperdrive protocol and responding to potential security issues.

Motivation

The Hyperdrive Public Testnet was the first public introduction of Hyperdrive for people to contribute to its research and development, and provide valuable feedback – all without putting real assets on the line.

When ‘EGP-29: Hyperdrive Public Testnet Implementation for Element DAO’ was put forward, it came with the following goals:

• Understand Hyperdrive

• Learn how to manage Hyperdrive from the governance point of view

• Receive feedback

• Review and test the Hyperdrive Protocol Smart Contracts

• Run bots

Now, over the past two months, we've seen over 6,000 unique wallets using the testnet, over 50,000 events across Longs, Shorts, and LP'ing, and trading volume reaching 1.5B through all markets. On top of that, Hyperdrive itself has improved greatly from feedback on the protocol codebase, documentation, and UI. Overall, the Hyperdrive Testnet experiment has been a huge success.

Now it is up to the Element DAO governance members to decide on the next steps for launching an Element DAO instance of Hyperdrive live on Ethereum Mainnet.

Milestones

Scope of Work (Milestones)

1. Milestone 1: Deployment of Element DAO Instance of Hyperdrive (and Pools) to Ethereum Mainnet

   • DELV will develop, deploy, and launch an Element DAO instance of Hyperdrive with 6-month pools on top of stETH and sDAI on Ethereum Mainnet.

2. Milestone 2: Security Monitoring and Incident Management (90 days)

   • 90 Days Completed of Security Monitoring and Incident Management Following Proposal Effective Date

     1. On behalf of the Element DAO, DELV will monitor, for a 90-day period, the health and safety of the Hyperdrive deployments. This includes, but is not limited to the following areas:

        1. Yield Source Hacks

        2. Hyperdrive Trading Vulnerabilities

        3. Hyperdrive Non-Trading Vulnerabilities

        4. Negative Interest Events (e.g., slashing events)

        5. Checkpoint minting failures

        6. Sunsetting Pools

Element DAO’s Payments to DELV as a Service Provider

Payment Schedule for services provided is based on two milestones:

1. Milestone 1: Deployment of Element DAO Instance of Hyperdrive (and Pools) to Ethereum Mainnet

   • DELV will push up an onchain payment proposal for Milestone 1 shortly after EGP-30 has been put forward.

   • Once the first onchain payment proposal has been approved and executed, DELV will officially transfer ownership of this instance of the Hyperdrive deployments on Ethereum Mainnet to the Element DAO.

   • Payment Details:

     • Development, Deployment and Transfer: 4,000,000 ELFI

2. Milestone 2: Security Monitoring and Incident Management (90 days)

   • Once the Security Monitoring and Incident Management has been in effect for thirty days, DELV will push up a final onchain payment proposal and will continue services for the remainder of the 90 days if approved and executed.

   • Payment Details:

     • Security Monitoring and Incident Management: 2,000,000 ELFI

For Specification, Proposed Code, Test Cases and so on, please read further in the forums:

https://forum.element.fi/discussion/23526-egp30-hyperdrive-ethereum-mainnet-launch-security-monitoring-and-incident-management-services

Next Steps (Voting Outcome Summary)

1. EGP-30: DELV Proposal for Hyperdrive Mainnet Launch & Security Monitoring and Incident Management Services Posted on Element DAO Forum (June 19th).

   a. DELV welcomes all questions and comments over the next week, but please be advised that DELV Team Members will not provide comments beyond formatting and technical commentary.

   b. Once the feedback has been addressed, this will move to be officially Proposed.

2. Once EGP-30 is Proposed, there will be a 1 week review period before it moves to the next stage, Offchain Poll (Snapshot).

3. EGP-30 Moves to Snapshot (Offchain Poll)

Because DELV will be handling the deployment process and then (after receipt of payment from the DAO) transferring ownership over to the Element DAO later, this proposal’s governance process doesn't require an onchain vote or any execution from the Timelock. As such, the final vote will be this Offchain poll.

a. On Snapshot, the governance community will vote for:

i. Yes: You agree that EGP-30 should be accepted.

ii. No: You disagree that EGP-30 should be accepted.

iii. Abstain: You formally decline to vote either YES or NO.

b. Snapshot Voting Period Ends (Off-chain Poll):

i. If this proposal passes the Off-Chain Poll, it will be formally approved and accepted by Element DAO governance (July 1-3rd).

c. Official Hyperdrive Mainet launch Goes Live (July 3rd)

Important note: DELV will provide logistical and technical support for putting the proposals off-chain (poll) and on-chain (vote), but neither DELV nor DELV Team Members will participate in the poll or vote. Furthermore, DELV engineers will provide technical comments only, when clarity is needed; they will not provide any statements on the wisdom or appropriateness of the proposal.