[IIP-35] - Update Liquidity Mining, Best Yield USDC and USDT yield sources and transfer budget for M2-2023

The following is an extract of the proposal posted on the Idle governance forum.

Authors

Treasury League and Development League

Summary

This IIP aims to update the IDLE incentives distribution of the Liquidity Mining program. The proposal also focuses on updating the USDC and USDT Senior Best Yield's underlying markets by adding Clearpool's Portofino (USDC) and Fasanara (USDT) Yield Tranches.

Rationale

1. $IDLE incentives distribution update v3

2. Continue the Liquidity Mining program for 3 months and update the distribution rate

Another option is to extend for another 3 months program but adjust its distribution rate.

• From 500 to 250 IDLE/day for the next 3 months

[...]

2. Clearpool YTs as a new yield source for USDC BY - Portofino

3. Clearpool YTs as a new yield source for USDT BY - Fasanara

After the recent exploit on Euler, Leagues have suggested removing the Euler Yield Tranches from the basket of yield source of Best Yield strategies as a precautionary measure before a new audit is completed.

The current yield source of the Best Yield strategies would then be:

Strategy	Token	Underlying markets
Senior BY	DAI	Aave, Compound, Euler
Junior BY	DAI	Euler, Morpho

These proposals aim to add new Clearpool Yield Tranches to the Senior Best Yield vaults on USDC and USDT:

1. Clearpool USDC (Portofino) YTs, with specs available on GitHub here
2. Clearpool USDT (Fasanara) YTs, with specs available on GitHub here

Portofino details

Portofino technologies is a high-frequency trading market maker that uses borrowed funds as trading capital, providing superior returns thanks to its advanced machine learning & stochastic control techniques.

Clearpool (Portofino) pool is live since early March. The Portofino pool has a size of ~$4.7m and a maximum borrowing capacity of up to $28m. Credora rates the borrower with an A.

Protocol	Borrower	Capacity	Pool size	Credora’s rating
Clearpool	Portofino	$28,624,138	4,754,744	A

At the time of writing, the Portofino pool provides 10.99% APR with a 64% utilization rate (source).

Risk rating

Following the new version of the risk rating framework, the Clearpool (Portofino) Yield Tranches can be considered as a valid market to become a new yield source of the Best Yield strategies.

In order to trigger any BY deployment, the Yield Tranches will need to have at least a 30% coverage on Senior funds coming from the Junior counterparty.

Fasanara details

Fasanara Digital is a quantitative investment fund applying a scientific approach to investing in cryptoassets with the aim to achieve exceptional risk-adjusted returns for its investors.

Fasanara Digital was started in 2019 as part of Fasanara Capital, a 200 people London-based hedge fund founded in 2011 that specializes in alternative credit and fintech strategies. Overall, Fasanara Capital manages more than $4 billion across different funds.

With a team of 15 people fully dedicated to investments and development in digital assets, Fasanara Digital manages a delta-neutral high turnover fund specialized in market-making and arbitrage strategies. The fund trades approximately $10 billion per month in volume on both spot and derivatives on all major trading venues and has approximately $75 million in equity.

Clearpool (Fasanara) pool is live since the end of March. The Fasanara pool has a size of ~$1m and a maximum borrowing capacity of up to $40m. Credora rates the borrower with an AA.

Protocol	Borrower	Capacity	Pool size	Credora’s rating
Clearpool	Portofino	$40,390,683	1,152,804	AA

At the time of writing, the Fasanara pool provides 14.25% APR with a 76% utilization rate (source ).

Risk rating

Following the new version of the risk rating framework, the Clearpool (Fasanara) Yield Tranches can be considered as a valid market to become a new yield source of the Best Yield strategies.

In order to trigger any BY deployment, the Yield Tranches will need to have at least a 24% coverage on Senior funds coming from the Junior counterparty.

4. Leagues M2-2023 Expected Budget

The expected budget for M2-2023 is $163,183 in stablecoin and 86,942.43 IDLE (with a 20-day rolling price at the time of writing).

Current Treasury League multisig stablecoin holdings currently stand at $68,223 so if the Temperature Check for IDLE tokenholders is positive, $94,960 will be transferred from the Idle DAO Fee Treasury via the next IIP. No need to transfer any IDLE at the current time.

Specifications

The code for the IIP-35 can be found on GitHub here and consists of eleven actions.

IIP-35 actions:

• 1 action to replace Euler Yield Tranches with Clearpool Portofino Yield Tranches on the Senior USDC Best Yield strategy
• 1 action to replace Euler Yield Tranches with Clearpool Fasanara on the Senior USDT Best Yield strategy
• 1 action to drop WBTC market from idleController. Removing it from the assets benefiting from the Liquidity Mining distribution of IDLE incentives.
• 1 action to reduce the Liquidity Mining distribution from 500 to 250 IDLE/day
• 4 actions to redeem stkAAVE, USDC, WETH, USDT worth in total ~96k$ from the Fee Treasury to fund M2-2023
• 3 actions to withdraw stkAAVE, SUSD, RAI worth in total ~400$ as those cannot be sold in Fee Collector to fund M2-2023

Where the Clearpool contracts addresses are:

• Clearpool Portofino USDC YTs 0x1329e8db9ed7a44726572d44729427f132fa290d
• Clearpool Fasanara USDT YTs 0xc4574C60a455655864aB80fa7638561A756C5E61