[Temperature Check] - Remove Idle Smart Treasury and deploy 200k IDLE into Bancor and Uni v3

Summary

This proposal will redeem liquidity from Idle Smart Treasury (210k IDLE and 14 WETH) to deploy 187k IDLE into IDLE/BNT pool on Bancor and 23k IDLE + 14 WETH into Uni v3 full-range pool. Idle DAO will benefit from Bancor single-sided liquidity deployment and impermanent loss protection while reducing slippage on DEX. Furthermore, the DAO will increase the robustness of Uni v3 oracle, allowing more users to safely interact with $IDLE lending platforms.

If the proposal passes the Temperature Check, it will be merged with the next IIP.

Motivation

Bancor deployed the first-ever automated market makers (AMMs) on Ethereum in 2017, and currently manages $1.3b in total liquidity. Bancor Protocol was audited multiple times, and its DAO launched a $100k bug bounty program via Immunefi.

The IDLE/BNT pool had $100k in liquidity, half in IDLE and half in BNT. Bancor DAO increased the depth of the pool to 250K BNT.

This proposal aims to deploy 187k IDLE from the current Smart treasury (Balancer pool) to the IDLE/BNT pool and earn a yield from that deposit.

A larger IDLE/BNT pool will result in having approximately 2x the liquidity currently held in Sushi IDLE/WETH pool, without the burden of incentivizing liquidity provision (Idle DAO already distributed 180k IDLE during a 6-month program) or owning the other asset of the pair. The expected slippage reduction will be extended to Paraswap too, as the DEX aggregator will simultaneously route the funds across multiple AMMs.

With the upcoming Bancor V3, there will be no cap on liquidity deployment, and the platform will also enable auto compounding rewards and instant impermanent loss protection. The 10% fee stream routed into the Smart treasury will be addressed to FeeTreasury, increasing its share to 20% of total performance revenues.

Bancor features and expected slippage reduction are detailed in the forum proposal.

Uni V3 Full-range liquidity deployment 14 WETH and equivalent IDLE value (~23k IDLE at the time of writing) now sitting into the Balancer pool will be deployed in UNI v3, covering the full price range. Idle DAO already funded UNI v3 pool with $120k in October, unlocking the Fuse listing. That oracle is currently used by Euler too, lending primitive with isolated markets. More liquidity into the Uni v3 will strengthen the oracle resiliency against manipulation attacks.

Voting Options

Please cast your vote on one of the following options: FOR: Approve Bancor and Uni v3 liquidity deployment AGAINST: Vote against Bancor and Uni v3 liquidity deployment DISCUSS MORE: Discuss more the proposal

This poll is available for both $IDLE token holders and stkIDLE holders. The final $IDLE voting weights will be calculated using the approved calculator.