Vote 014: Loaning 2,270 GVT to Loopring zkRollup to offer Vault as a yield option for Loopring users

Background and summary

  • Gro has had a successful partnership with Argent wallet and has a roadmap item to integrate with further wallets
  • Doing this is a way to bootstrap another user interface/wallet and expected to increase protocol TVL, as well as create an additional Layer 2 route to access Gro products
  • To enable the partnership by providing Loopring with sufficient liquidity, we propose to loan 2,270 Gro Vault Tokens (GVT) (worth ~ $400k) to Loopring Loopring Technology Ltd to list GVT as a passive yield option for Loopring Exchange and Loopring wallet.
  • Loan to be repaid after 1 year unless extension agreed with DAO

Vote 014: Loan 2,270 Gro Vault Tokens (GVT) (worth ~$400k) to Loopring to establish a yield option in their Layer 2 exchange and smart wallet

The proposal that Gro DAO loans Loopring Technology Ltd 2,270 Gro Vault Tokens (GVT) (worth ~$400k) to provide them with sufficient GVT liquidity to enable them to list GVT as a passive yield option for Loopring Exchange and Loopring wallet users

Loopring will return the same amount of GVT one year after receiving them unless both parties agree to extend the agreement (in this case, there would be a further voting procedure within Gro DAO).

The DAO would fund this loan by minting additional GVT (using existing USDC).

Who is Loopring? Loopring is an Ethereum zkRollup with a focus on trading and payments. Loopring has been around since 2017 and has over 65,000 L2 accounts, and almost 30,00 Loopring smart wallet users have stablecoins sitting idle in their wallets (See here Loopring Quarterly Update (Q1/2022))

Why do we want to do this? Argent wallet has been our partner since the first hour and has proven to be a very fruitful partnership (the second largest Vault wallet holder group are Argent zkSync customers, in addition to all layer 1 Vault and PWRD holders using Argent). We are now planning to expand our partnership with other wallets and other end-user gateways in order to grow TVL and give more users access to Vault and PWRD yields and protection.

The integration of Gro products within other wallets is one of our top priorities and part of the 10x initiatives we have presented in our 2022 roadmap. We think it’s an excellent opportunity to be one of the first yield providers to Loopring users and promote Gro protocol further

Risks of approving the proposal and steps to mitigate

1. Risk that Loopring does not return GVT after 1 year

  • Loopring is a well-established project that has been around for more than five years
  • Loopring raised more than $45M during its ICO in 2017, and the governance token $LRC has a market cap of almost $1BN
  • We find it highly unlikely that Loopring will act malicious, given it’s opportunity universe and great reputation among the DeFi community

2. Risk that Loopring does not offer GVT to users

  • Loopring has confirmed to us in written form to offer GVT to their users
  • In terms of Loopring’s opportunity cost, we believe it is highly unlikely that Loopring will not offer the GVT to users

3. Loopring stops providing yield services to users

  • Loopring would, in this case, return the borrowed GVT to Gro DAO earlier
  • This has also been confirmed to us in writing form
  • We assume a low risk, as Loopring probably does not want to shed its excellent reputation

Next steps

After 3 days in the community forum, if there are no major unresolved objections or comments, the proposal will be posted as a vote where it will remain live for a further 5 days.

This is a shorter voting process than usual, as this is a relatively small sum (<2% of treasury) that is being loaned, not spent. It is still over 7 days from end-to-end.

We will use our dedicated discord channel to discuss the proposal so that all DAO members are aware of the proposed changes and have the opportunity to consider and discuss ahead of voting.

Should we loan 2,270 Gro Vault Tokens (GVT) (worth ~$400k) to Loopring to establish a yield option in their Layer 2 exchange and smart wallet?

  • Yes
  • No

0 voters

3 Likes

Super excited about another killer L2 wallet partnership!

Vote 14 is active now! Snapshot. We decided on 7 days voting time after all, as it is not time-critical

1 Like

This is my first post here, excited to be part of the discussion!

I’m onboard with the premise of this partnership. Regarding the specifics of how we plan to help bootstrap liquidity on Loopring, I’d be curious to hear about what alternatives we’ve considered to these specific mechanics of mint from Treasury + loan out on reputation. Is there prior art we can point to for how this has been done for other projects? Did we do something similar when we launched with Argent?

(No need to rehash past discussions, if there’s a list of links I can read up on that’d be awesome :pray: )

1 Like