Vote 015A: Whitelist MUSD-3CRV Convex strategy

TLDR: This proposal sets out selected Convex strategies for whitelist and approval for use in Gro protocol

Original community forum post here: https://community.gro.xyz/t/vote-015-gro-protocol-strategy-selection-whitelist/296

Background and summary

• Over the past week there has been significant losses incurred by Vault users as part of the UST de-peg
• There will be a future post-mortem on this separately, including discussion around risk management and possible compensation options
• As an urgent priority however we should confirm whether the DAO is comfortable with the current strategies in place, together with new proposed strategies to replace UST

Vote 015A: Whitelist MUSD-3CRV Convex strategy for use in Gro protocol

Gro protocol has been designed to use Convex pool strategies following Gro DAO Vote 009. All these strategies pair 3CRV with a different stablecoin.

That means each strategy has full exposure to each of the 3CRV assets plus whichever stablecoin is also in the pool. As we saw with UST wormhole, if any of the assets moves off-peg then this results in a loss for the strategy as a whole.

Proposal that Gro DAO approves MUSD-3CRV Convex strategy for use in Gro protocol with (1) a maximum Vault exposure of 50% and (2) a stop-loss in place in case of significant de-peg (future DAO vote to decide on exact parameters for this).

More information on MUSD

• Created by mStable and backed by stablecoin collateral (similar design to PWRD)
• Relatively low depth in the pool meaning at higher volumes there would be greater slippage
• Live for 22 months with a DeFi safety score of 93% and market cap of $50m
• Read more here: https://docs.mstable.org/
• Link to pool: Curve.fi (pool depth: $34m as at 16th May)
• Current Convex yield 8.25% (as at 17 May)

Voting process

FOR: Approve the strategy for whitelist on Gro protocol AGAINST: Do not approve the strategy for whitelist on Gro protocol ABSTAIN: No opinion on approving this strategy for whitelist on Gro protocol

Next steps

This vote will run for 3 days.

Each strategy that receives majority approval (ignoring abstain votes) will be added to the protocol whitelist, meaning there is DAO authority to allocate protocol funds (within the maximum Vault exposures).

Future strategies can be suggested and voted on by the DAO, and at any time community members can also propose a removal of a strategy from the current whitelist.