Summary

The IPOR DAO welcomes the intention of IPOR Labs to develop a new product for DeFi yield optimization, which will be called IPOR Fusion. By voting YES for this proposal, the DAO expresses its approval.

Theme/Problem/Issue

Liquidity in DeFi remains highly fragmented in 2024 and markets are still inefficient. There is a great need for intelligent, data-based asset management among almost all market participants, whether retail, whales, DAO treasuries or institutional investors.

Solution

The knowledge and skills that the IPOR Labs team has gained over the last few years while developing the IPOR protocol are ideal for developing a new asset management and yield optimization product. In particular, the high level of specialization in data collection and analysis as well as the development of quant models enable the creation of intelligent asset management. IPOR Labs shared its vision for IPOR Fusion in the following blog post:

IPOR Fusion: Transforming Liquidity into Pure Energy

At the same time, a yield optimization system ensures more balanced interest rates in DeFi, which could be reflected in less volatile IPOR indices. This in turn enables better pricing of interest rate swaps and thus higher trading volumes.

For these reasons, the IPOR DAO welcomes IPOR Labs' proposal to dedicate itself to the development of IPOR Fusion in the coming months.

IPOR Labs intends to release IPOR Fusion in a rolling launch. The development steps of IPOR Fusion will be presented with more detailed proposals so that the DAO will have the opportunity to vote on them separately.

What is IPOR Fusion?

IPOR Fusion is a meta DeFi aggregation, execution & intelligence engine that introduces a unified liquidity framework for on-chain asset management.

Fusion combines various aggregation and routing protocols into a single smart contract layer, automating asset management and maximizing returns across yield sources.

Imagine intelligence-driven execution for looping, carry trades, arbitrage, leveraged farming, and passive lending at your fingertips.

IPOR Fusion for..

• Protocols: Optimize capital efficiency and earn yield with idle capital by using Fusion to automate asset allocation
• Funds and Fund Managers: Design, deploy and monitor DeFi strategies with ease using Fusion’s customizable risk parameters and versatile architecture and attract capital onchain.
• DAO Treasuries: Optimize yield while minimizing risk by utilizing Fusion's capabilities for asset management and strategy composition.
• Liquidity providers: Put capital to work allocating to strategies curated by some of the best minds in DeFi

Fusion is all about risk-adjusted returns, empowering any user profile- from the most risk-averse allocator to the most degen DeFi participant- to achieve their target returns!

Why Fusion?

• Optimized Yield: Fusion provides intelligence-driven execution for various DeFi operations, including looping, carry trades, arbitrage, and leveraged farming, curated by experts in the field.
• Efficiency: Fusion offers a single integration point for accessing multiple yield venues, reducing operational burden and enhancing capital deployment efficiency.
• Time to market: DeFi moves fast. Fusion supports quick integration of new protocols, allowing strategists to capture the latest opportunities.
• Risk Management: Fusion includes an intelligence layer for automated rebalancing, optimization and risk management, ensuring users can react to market changes effectively. Siloed risk exposure between Fusion vaults ensures potential losses are not socialized.
• Security: Built by seasoned developers of battle-tested smart contracts and audited by top-tier firms, Fusion brings peace of mind to users so they can focus on their strengths and priorities.
• Network effect without risk “spill-over”: IPOR Fusion adoption offers a growing “palette” of protocol integrations and business logic paired with “siloed” risk exposure protecting users from spillover effects.

From passive liquidity providers, to builders and sophisticated asset managers, IPOR Fusion allows its users to make the most of their resources, focusing on their strengths and expertise and accessing optimized yield (and across the risk appetite)

Discussion

The development of IPOR Fusion in no way represents a pivot away from interest rate derivatives. Rather, IPOR Fusion enables the implementation of IPOR IRS and SRS at vault level in one click solutions. IPOR Labs intends to further develop IRS and SRS and continues to see the IPOR protocol as a liquidity and yield hub for DeFi.

Timeline/Steps

1. Discussion: Discussion in the open governance forum for 3 days.
2. Vote: After this period the proposal will be moved to #formal-governance and a Snapshot vote will be held.
3. Implementation: Details will be set out in upcoming proposals

Cost Estimation

The IPOR Labs team has already signaled that the costs considered for developing IPOR Fusion falls within the software development scope and services rendered and paid for from the protocol’s initial funding.

Commitment

Transparency: IPOR Labs will have a commitment to being transparent about the development and implementation of the proposal. This will include providing regular updates on the progress of the changes and sharing any relevant data or information with the community.

Community engagement: IPOR Labs will actively engage with the IPOR community throughout the development and implementation of the proposal. This will include soliciting feedback from the community and incorporating their suggestions and concerns into the proposal.

Responsiveness: IPOR Labs will be responsive to any questions or concerns raised by the IPOR community about the proposal. This will include providing timely and accurate responses to any inquiries from the community.

Accountability: IPOR Labs will be accountable for the impact of the proposal on the IPOR Protocol and its community. This will include tracking the KPIs mentioned earlier and making any necessary adjustments based on the results.