Vote 014: Mint 2,270 GVT and loan to Loopring zkRollup to establish a yield option in their Layer 2 exchange and smart wallet

TLDR: This proposal asks for minting and loaning 2,270 Gro Vault Tokens (GVT) (worth ~$400k) to provide Loopring with sufficient GVT liquidity to enable them to list GVT as a passive yield option for Loopring Exchange and Loopring wallet users

Original community forum post here: https://community.gro.xyz/t/vote-014-loaning-2-270-gvt-to-loopring-zkrollup-to-offer-vault-as-a-yield-option-for-loopring-users/286

Summary

Gro has had a successful partnership with Argent wallet and has a roadmap item to integrate with further wallets Doing this is expected to increase protocol TVL, as well as create an additional Layer 2 route to access Gro products To enable the partnership by providing Loopring with sufficient liquidity, we propose to loan 2,270 Gro Vault Tokens (GVT) (worth ~ $400k) to Loopring Loopring Technology Ltd to list GVT as a passive yield option for Loopring Exchange and Loopring wallet. Loan to be repaid after 1 year unless extension agreed with DAO

Vote 014: Mint 2,270 Gro Vault Tokens (GVT) (worth ~$400k) and loan them to Loopring to establish a yield option in their Layer 2 exchange and smart wallet

The proposal that Gro DAO mints and then loans Loopring Technology Ltd 2,270 Gro Vault Tokens (GVT) (worth ~$400k) to provide them with sufficient GVT liquidity to enable them to list GVT as a passive yield option for Loopring Exchange and Loopring wallet users

Loopring will return the same amount of GVT one year after receiving them unless both parties agree to extend the agreement (in this case, there would be a further voting procedure within Gro DAO).

The DAO would fund this loan by minting additional GVT using existing USDC from the Gro DAO treasury.

Who is Loopring?

Loopring is an Ethereum zkRollup with a focus on trading and payments. Loopring has been around since 2017 and has over 65,000 L2 accounts, and almost 30,00 Loopring smart wallet users have stablecoins sitting idle in their wallets (See here https://blogs.loopring.org/looping-quarterly-update-q1-2022/)

Why do we want to do this?

Argent wallet has been our partner since the first hour and has proven to be a very fruitful partnership (the second largest Vault wallet holder group are Argent zkSync customers, in addition to all layer 1 Vault and PWRD holders using Argent). We are now planning to expand our partnership with other wallets and other end-user gateways in order to grow TVL and give more users access to Vault and PWRD yields and protection.

The integration of Gro products within other wallets is one of our top priorities and part of the 10x initiatives we have presented in our 2022 roadmap.We think it's an excellent opportunity to be one of the first yield providers to Loopring users and promote Gro protocol further

Risks of approving the proposal and steps to mitigate

Risk that Loopring does not return GVT after 1 year

• Loopring is a well-established project that has been around for more than five years
• Loopring raised more than $45M during its ICO in 2017, and the governance token $LRC has a market cap of almost $1BN
• We find it highly unlikely that Loopring will act malicious, given it’s opportunity universe and great reputation among the DeFi community

Risk that Loopring does not offer GVT to users

• Loopring has confirmed to us in written form to offer GVT to their users
• In terms of Loopring's opportunity cost, we believe it is highly unlikely that Loopring will not offer the GVT to users

Riks that Loopring stops providing yield services to users

• Loopring would, in this case, return the borrowed GVT to Gro DAO earlier
• This has also been confirmed to us in writing form
• We assume a low risk, as Loopring probably does not want to shed its excellent reputation

Voting process

This vote was discussed in the Gro community forum and Discord for 3 days. The vote will run live for a further 7 days.

Yes Mint 2,270 additional Gro Vault Tokens (GVT) (worth ~$400k) and loan them to Loopring

No: Do not mint additional 2,270 Gro Vault Tokens (GVT) (worth ~$400k) and loan them to Loopring