Summary

Wintermute is requesting the approval of a YFI loan to Wintermute Trading and authorization of a transfer of 350 YFI ($1.98M) from the DAO’s treasury to Wintermute Trading for 12 months at a 0.10% interest rate to be paid in kind at the end of the loan term. Separately, as part of Wintermute’s continued engagement on Yearn, Wintermute plans to utilise its funds of up to 3M CRV ($1.4M) to buy yCRV and subsequently add and deploy our assets to the yCRV-CRV Curve pool (lp-yCRV V2) on Yearn for a minimum of 12 months. We believe that this should help rebalance the pool which currently sits at 59%/41% yCRV/CRV, improve the yCRV peg, and increase the pool’s liquidity.

Abstract

If adopted, this proposal seeks to:

• Transfer a loan of 350 YFI to Wintermute Trading for 12 months.
• Require Wintermute Trading to utilise up to 3M CRV to buy yCRV and subsequently add and deploy our assets to the yCRV-CRV Curve pool (lp-yCRV V2) on Yearn for a minimum of 12 months.
• Establish a 3/4 multisig with 2 Wintermute members and 2 Yearn contributors (wavey and dudesahn).
• Require Wintermute Trading to deposit their CRV and/or lp-yCRV to the multisig to act as collateral for the loan.

Background

The past few weeks have once again tested the resilience of DeFi off the back of a bug in specific versions of Vyper. Subsequently, CRV’s largest source of on-chain liquidity vanished due to the CRV/ETH Curve pool being drained. This once again raised alarm bells for the Aave community as the price of CRV went down and the probability of insolvency inched closer due to Michael’s large CRV position on Aave V2.

With little on-chain liquidity present and multiple loan positions to manage, a series of OTC trades were conducted with various parties across DeFi, including Wintermute Trading. We are now looking to deploy some of the CRV tokens on protocols where CRV is locked perpetually, including Yearn!

We strongly believe in the vision of a truly decentralized world and Yearn has played an extremely positive role in empowering and advancing this vision. Therefore, we’d love to proactively engage with the Yearn community and the DAO by utilising up to 3M ($1.4M) of our CRV to purchase yCRV, and then deploy a mixture of our assets to the yCRV-CRV liquidity pool on Curve which only has $3.75M in TVL.

Wintermute’s Basic Background:

Wintermute Trading is a leading crypto-native algorithmic trading firm, specializing in creating efficient markets across centralized and decentralized exchanges. Wintermute was founded in July 2017 by three Optiver veterans. Evgeny Gaevoy, founder and CEO, was previously head of ETFs (screen and OTC) at Optiver Europe, one of the largest ETF market-making desks. Since our inception, we have traded over $3T and expanded our presence across 80+ (de)centralized exchanges and various (non)EVM chains, continuously supporting the ecosystem for our partners and their communities.

Alongside our trading arm, Wintermute Ventures and Wintermute Governance support and work with leading crypto projects with the goal of truly adding value, enabling partnerships, and helping shape a positive outcome for the ecosystem. Importantly, we do not target large ownership stakes; decentralized ownership is an important prerequisite to transitioning to a robust future.

Specification

Wintermute’s plans:

• Borrowed YFI will be used exclusively for trading purposes. No farming, lending, voting, etc.
• Use up to 3M CRV ($1.4M) to buy yCRV (depending on the ratio of yCRV-CRV in the liquidity pool).
• Deploy yCRV tokens to the yCRV-CRV pool and stake this on Yearn for a minimum of 12 months.
• Has the optionality to swap the lp-yCRV to vl-yCRV for active participation in the Curve Wars.
• Our CRV (whether that be yCRV, st-yCRV, lp-yCRV, vl-yCRV) will be held in a 3/4 multisig with 2 Wintermute folks and 2 Yearn contributors (Wavey0x and xx). This ensures no transaction can be made without at least one signature from a Yearn contributor.
• Yearn multisig operators agree to approve anything we do as long as it’s within the Yearn + CRV ecosystem (e.g., swapping to vl-yCRV). After 6 months we have the option to return the YFI and receive our collateral back.

Our Ask: Wintermute Trading is requesting approval for a 12-month loan of 350 YFI ($1.98M) at a 0.10% interest rate from the DAO’s treasury.

Loan Repayment: Wintermute Trading agrees to return the full 350 YFI loan amount and 0.10% interest paid in kind to the DAO’s treasury at the end of the 12-month period.

Implementation

If approved by the Yearn DAO, 350 YFI will be sent from the DAO’s treasury to Wintermute’s address: 0xDBF5E9c5206d0dB70a90108bf936DA60221dC080 A 3/4 multsig will be created as described above and Wintermute Trading will transfer their CRV to this multisig according to the outlined specification.

After this has been completed, we will update the community with the multisig address in both the original forum post and the Yearn discord.

Voting Options

For: Approve this proposal and implement as laid out in Specification. Against: Do nothing.