[RFC]: Expand Gro protocol’s Strategy Whitelist

Background and summary

  • Gro protocol operates on a list of whitelisted strategies to offer the best risk adjusted yield for users. Since May 2022, Gro DAO has whitelisted 8 Curve pools with sufficient liquidity depth and credible backing.
  • This post proposes to whitelist additional strategies as the yield landscape evolves. This aims to ensure that Vault and PWRD yield remains competitive and users have appropriate exposure (currently set at max 50% with Vault for each strategy).
  • This post (1) summarises two new strategies TUSD-3CRV and BUSD-3CRV, and (2) asks for community input on other stablecoin strategies for the protocol to explore.

Additional strategies proposed for whitelist

BUSD-3CRV (Convex)

BUSD summary and proposal rationale

BUSD is issued by Binance in partnership with Paxos. As a 1:1 USD-backed stablecoin approved by the New York State Department of Financial Services (NYDFS), BUSD can be purchased and redeemed freely with both Binance and Paxos.

  • BUSD has been live since Sept 2019. It has a market capitalization of 17B as of June 2022 based on the latest monthly attestation report (Attestations - Paxos).
  • Founded in 2017, Binance is the largest centralised exchange now with 13B daily trading volume, according to CoinMarketCap (Binance trade volume and market listings | CoinMarketCap).
  • Paxos is a regulated crypto brokerage that offers custody, settlement, OTC and stablecoin payments.
  • Link to pool: Curve.fi (pool depth: $45m as at 10th Aug)
  • Current Convex yield 4.58% (as at 10th Aug)

BUSD remains pegged closely to $1 for the last 90 days

BUSD has increased liquidity on the Metapool curve in the last 90 days

TUSD-3CRV (Convex): revote


TUSD was part of Vote 15 and did not pass. However we assess that the yield and liquidity landscape of TUSD has improved in the last 3 months, showing a more favourable risk and reward profile. It has also weathered the liquidity drain in stablecoin depeg events (UST for example), demonstrating high resilience and an increased Lindy effect.

TUSD summary and proposal rationale

What has changed since May:

  • Both the yield and liquidity of the TUSD Curve metapool has improved.
  • The pool balance of TUSD has reversed since May, making TUSD the more sought-after stable in the pool.

TUSD remains pegged closely to $1 since May

TUSD has increased its curve liquidity relative to its market capitalization

Why TUSD is proposed for a second time

  • We are bringing back this vote on TUSD because the price of TUSD has been stable and closely pegged at $1 in the curve metapool for the last 3 months.
  • We regularly evaluate metastables and only include those that fit into our risk framework and are proved to have a stable mark-to-market price. For example, MIM has not been brought back for another vote since it remains very volatile.
  • We do not intend to bring back the same candidate for a 3rd time in the foreseeable future.

New community strategy ideas

The DAO needs a steady supply of new strategies from the community. We have MJohann and Sonic to credit for regular suggestions of ways to diversify yield and we need more!

If you have yield strategy suggestions, please vote on “New strategy not listed above” below and then add into the Comments section what you’d suggest. The more detail the better! The DAO could also vote to fund contributors to develop strategies themselves if this was of interest.

Indicative Community Vote

Which of the following strategies should be put up for a DAO vote (can select more than one):

  • BUSD-3CRV (Convex)
  • TUSD-3CRV (Convex)
  • New strategy not listed above

0 voters

Next steps

Indicative vote runs for 4 days together with requests for further feedback.

After this point we’ll put a DAO vote up with any of the strategies that have positive community sentiment. That vote will run for 3 days as per other strategy votes.