Hey Radicle community! It’s Joyce from Gro Protocol
We would like to propose helping you manage part of the Radicle Treasury through our risk-tranched stablecoin PWRD, which offers deposit protection while generating yield. Our goal is to make it work like an FDIC protected account but in DeFi with healthy yields.
Benefits:
Protect your stablecoin treasury from high-impact tail risks like the failure of a major stablecoin or protocol through (1) our Risk Balancer mechanism that ensures exposure to multiple stablecoins & protocols and (2) risk-tranching where Vault, our leveraged yield farming product, would absorb the loss for Treasury users if such failure occurs.
Enable further diversification of treasury assets away from native token RAD, so that the treasury balance can reliably support the growth of the Radicle Ecosystem – even in a market downturn. Radicle Treasury has about ~4% assets in USDC ($21.6M) with the remaining 96% in RAD tokens. As token price could vary significantly with market fluctuations, allocating a larger part of it to stablecoins could ensure there are enough funds to commit to new projects built upon the Radicle Ecosystem.
Generate healthy yields on your treasury balance instead of having the funds staying idle until they’re deployed. With a base yield and having options to earn token incentives on top, we believe Radicle’s Treasury stablecoin balance would be better placed to support growth of the ecosystem. Details on token incentive options will be available once we complete our upcoming token launch via a Balancer Liquidity Bootstrapping Pool this month.
Suggested implementation: We suggest Radicle to allocate a pilot deposit that amounts to 0.5%-1% of your stablecoin treasury ($108k - $216k USDC). You could decide to increase the allocation later on after having confirmed that our treasury product meets your expectations.
Next step: This proposal should be taken into consideration alongside other alternatives and be thoroughly discussed with the Radicle community. The discussion could naturally occur here, but we’re also happy to join a community AMA with other protocols offering treasury service to discuss how we can best help Radicle best manage your treasury together.
What is Gro Protocol?
Gro protocol is a stablecoin yield aggregator that tranches risk and yield through its PWRD stablecoin, which offers deposit protection, and Vault that provides leveraged yield farming. Our public beta was launched in mid-August 2021 following the announcement of our partnership with Argent. We have gone through three audits and currently host a Bug Bounty program with Immunefi. We are listed on Defillama and DeBank and have been integrated on Zapper. We will be launching our governance tokens through a Balancer Liquidity Bootstrapping Pool this month.
how decentralized is Gro? for instance, are there admin keys still involved in the process?
are there any audits ongoing? beyond the ones you list on your website?
what’s the role of the governance token that you are planning to launch?
your suggested implementation for Radicle sounds sensible. assuming that the community decides to allocate that pilot amount, what does success looks like beyond that? how should we all thinking about it?
GRO governance is getting decentralised as we speak. Votes are up on snapshot with on-chain execution through SafeSnap, so that protocol users can adopt the proposed tokenomics and actually launch the token. After the governance itself is decentralised we can then decentralise the protocol. That means right now there are still some admin keys involved but we are aggressively moving towards decentralisation.
We have completed three audits. This week we are doing an audit with ToB on one of our new strategies. We don’t have another audit for the overall protocol planned yet, but will likely schedule with ToB after the current one is done.
Gro DAO tokens will control protocol parameters like leverage/protection ratio, performance fees, or allocation ratios across stablecoins and protocols. We’re looking at additional ways where staked GRO can be used to stabilise the protocol as a third line of defense, but it is not finalised yet. Lastly, GRO can be staked down in various liquidity mining programs.
A successful pilot should demonstrate to the Radicle Community that the stablecoin treasury balance with Gro generates a consistent base yield at 5%+ and that the protocol continues to be robust with growing TVL. At that point I would encourage the Radicle Community to consider (i) allocating a larger portion of stablecoin treasury to Gro so to get more of your stablecoin balance to work for you, and (ii) earning extra token incentives through staking in our pools. As we build trust after working together for longer, we could also explore other treasury diversification options such as token swap.
Hope this helps! Let me know if you have other questions!
Hi @Joyce-gro , thank you for sharing this proposal! Overall I think this is a good idea, yield generation with stablecoins is a great place to start, if deposited in low-risk, passive strategies.
A few questions:
What types of yield farming strategies would be used? Are there any historical data around performances of the various vaults? What are expected returns, it would help us understand how to balance it vs. ongoing treasury expenses.
How does the Risk Balancer mechanism work? Can users select which strategies/protocols they’re exposed to?
What is Gro Protocol’s protocol fee?
In terms of implementing this, what type of work/coordination between Radicle Governance and Gro would it take to complete this?
Hey @derek ! Glad to know you find the idea helpful!
On your questions:
We currently allocate to 7 stablecoin yield strategies on Compound, Idle, Curve, and Cream. Please see our exposure & the overall historical performance in these two charts on our dApp. We are planning to add another yield strategy in the next few weeks that will allow us to take LP provisions while managing impermanent loss downside. Watch this space!
The Risk Balancer makes adjustments across the defined strategies, so to avoid over-exposure in any stablecoin or protocol. At this moment users cannot select which strategies their funds would particularly be allocated to, but they can propose strategies at https://community.gro.xyz/ the DAO can then vote to adopt them
Gro Protocol currently does not charge performance fees, although the DAO could vote to change that. Right now we have a withdrawal fee of 0.5% (“HODL contribution”) that goes back to all users remaining in the pool, but we are also considering whether we can lower that.
On implementation, if the Radicle Community votes for the above proposal and decides which amount you would like to use for the pilot deposit, you could directly make the deposit through our dApp into our PWRD stablecoins.
Let me know if you have any other questions! Happy to chat more in a community call if you think it would help folks better understand this proposal or Gro Protocol
