Proposal
Launch Idle strategy for USDC Clearpool Senior PYT (Perpetual Yield Tranches), based on the Wintermute pool, with the following parameters:
- Accepted Collateral: USDC
- Max LTV: 50%
- Deposit Caps: USDC = $2m
- Repayment and Liquidation Caps: USDC = $1m per 60 minutes
- Maximum Loss: USDC = 5 bps (0.05%)
- Cap Raises: Vault is not pre-authorized to have its caps automatically increased.
Context
Alchemix is currently supporting 11 strategies, and two of them provide yields on USDC: yvUSDC (0.19% APY) and aUSDC (0.31% APY).
This proposal aims to improve the suite of stablecoin collateral, allowing Alchemix to generate additional demand for alUSD thanks to self-repaying loans via USDC Clearpool Senior PYT based on the Wintermute pool (5% APY).
Deposits in Clearpool Senior PYT are fully fungible, there are no locking periods or epochs: liquidity providers can deposit and redeem liquidity anytime. The yield is accrued natively in USDC, as CPOOL incentives are automatically harvested.
Alchemix DAO already approved a PYT-based collateral, voting in favor of stETH Senior PYT as Alpha Vault. Due to stETH peg concerns, Alchemix paused support for liquid staking solutions, which can be restored after the merge.
The implementation of USDC Clearpool Senior PYT would not suffer this peg risk, being based on dollar value.
In order to speed up the implementation development and reduce efforts for Alchemix core devs, this proposal comes with a grant request equal to $2.5k in ALCX tokens to let Idle DAO build the vault adapter.
Liquidity scalability
Clearpool developed an interest curve mechanism that encourages borrowers to optimally utilize liquidity in their pools while increasing lenders' compensations.
The underlying yield generated by Clearpool is mainly composed of organic lending returns, limiting APY dilution with liquidity growth.
Currently, Wintermute pool provides 9% APY with an 80% - 85% utilization rate (source). The Senior tranche is designed to receive at least half of this return, resulting in a minimum of 4.5% APY. In the event of a default, the Junior tranche would cover potential losses with its own liquidity, reducing the exposure to borrowers’ risks. In return, Junior LPs receive a boosted APY.
Thanks to Clearpool’s first-of-its-kind formula, APYs can be maintained stable by high pool utilization up to borrower capacity - equal to $746m for the Wintermute pool.
Real yield generation and liquidity scalability allow Alchemix to implement an underlying yield source able to satisfy protocol TVL growth without impacting users’ returns in the long term.
The aim is to gauge sentiment within the Alchemix community and then launch a Snapshot to move to the implementation phase.
About Idle DAO: Website | Twitter | Discord | Medium | Documentation
About Clearpool: Website | Twitter | Telegram | Medium | Documentation