[RFC::Ecosystem-Grant] Fair Funding Platform by Unstoppable

0xNic

Proposal:

Give a grant to support the audit cost of the Fair Funding platform built on Alchemix by Unstoppable.

Introduction:

We at Unstoppable are an early stage DeFi project (pre-funding, pre-revenue) and have come up with a way for projects like us to be fairly funded with the help of Alchemix.

While we are experienced devs and have a strong internal security process, we definitely want to get an external audit by a reputable and competent audit team to ensure the safety of user funds and the Alchemix ecosystem.
Given our early stage and the price tag of a good audit these days, this grant would help us achieve a level of certified security that we simply couldn’t afford otherwise.

Context:

Unstoppable:

Our vision at Unstoppable is to build the best risk:reward DeFi products in the space and make them accessible to everyone.
And to give back.
(Learn more about our vision here)

We didn’t want to sell a token before we’ve released products, proven PMF and are making real revenue. We also didn’t want to sell out to the VCs.
So out of necessity we came up with a new way for funding early stage crypto projects like us.

Fair Funding In Crypto:

A project being sustainably funded, with substantial benefits for the early supporters and no risk of them losing their money - built on Alchemix and a Nounsdao concept.

One daily auction for a “Fair Funding Spot”
The spot carries a significant benefit in the project such as a discount or bonus in the future tokensale, reduced fees or boosted yields
All proceeds from the auction are put into an Alchemix vault. A non-liquidatable, self-repaying loan is then taken out which will be the actual funding going to the project.
The funder/investor retains complete ownership of the original funds and gets back 100% over time! Either paid back early by the projects success, or in a worst case scenario by the self-repaying loan on Alchemix over time.

This significantly reduces the risk profile of contributing funds to an early stage project, yet allows the project to raise in a sustainable way - a fair win/win for all parties.

Current Status:

The contracts are already about 75% complete. They've been developed fully test-driven with 100% test coverage in Vyper. The core functionality is already in place, what's still missing is advanced features like migrating between Alchemix vaults to capture the best yields and an opt-out possibility to self-liquidate since we want offer our users the maximum amount of freedom and don't have them locked in (debt positions are fully tokenized and tradeable as well).
When complete they will go through our strict internal security process which we've outlined here.

After that we would want them to be audited by a reputable and competent external auditing team.

Unstoppable:Team

Our Core Team

Alchemix Grant

Benefits for Alchemix

The Fair Funding platform built on Alchemix highlights the new composability of the Alchemix v2 platform with a project that contributes real value to builders and communities in the space.

It will bring volume and new users to the Alchemix platform and showcase the possibilities of building on and with Alchemix.

Usage of Grant

The primary use of the grant would be to pay for an official audit of the Fair Funding contracts by one of the reputable and competent audit companies. We are already in contact with ChainSecurity who would be our ideal choice and are waiting for a quote. In case ChainSecurity is too expensive, we've already established a relationship with Sherlock.xyz who could be a viable alternative.

Any excess funds would be used to support further development of the platform (such as UI) and to spread awareness of the new Fair Funding possibility powered by Alchemix.

Delivery of Grant (in case the proposal passes)

We are happy to complete the work on the contracts before the grant would be payed out to eliminate execution risk.
We are also happy to have the Alchemix team escrow the grant funds (or be part of a multisig) to ensure the funds are only used as outlined above.

Size of Grant

The scope of the audit would need to cover the three main contracts (Auction, Vault, tokenized position). It should be <1000 lines of code which according to Sherlocks pricing would put it somewhere towards the mid-to-high end of the $15-$38k range. (Vyper pricing is slightly different according to Sherlock).
We are still waiting on an estimate from ChainSecurity but given that they have a longer track record and have established themselves as one of the best auditing teams out there, we expect their quote to be higher.

And as we said above, any funds beyond the pure audit cost would be put to good use to make more teams know about and use the Fair Funding platform.

We hope the Alchemix community can help us suggest what a fair amount for this grant would be.

Summary

By supporting this grant request, you would help a young project that's determined to add value to the space and establish itself as a good player and you would help expand and ensure the safety of the Alchemix ecosystem.

Voting Options

For: Audit only (Sherlock) ₁.5-2k ALCX (exact amount determined by Sherlock)
For: Do it properly - ChainSecurity Audit or Sherlock + dev support ₂.5k-7k (exact amount to be discussed in comments)
Against: We shouldn't fund this at all
Abstain: I have a better idea (see comments)

0xNic

Hi! Nic from Unstoppable here. We're glad to become part of the Alchemix ecosystem!

Let me know if I missed anything or if you have any further questions.
I'm looking forward to hear what the community thinks about what we're building and to see if there is a way to work more closely together!

ov3rkoalafied

Love the idea. I think given the stage the project is in (not deployed, no clear PMF yet, high risk), "do it properly" option is too high. I would support some variation of option 1, with the flexibility to use some stables instead of purely ALCX. Overall I also think being early to the Alchemix grants program should be rewarded and grants can ratchet down if we start sparking a lot more interest and getting a lot of new requests.

I also agree that the grant should be paid as late as possible (retroactive as much as possible). So that would probably mean that Alchemix agrees to pay a tad before the payment to Sherlock is due (We have already been in contact with Sherlock before so they know us, we can tell them we will be paying should this proposal pass).

Do you have any tentative plans or goals to pursue funding after passing audit? Since I don't think another alchemix grant would be on the table to continue funding, unless maybe a long way down the line the protocol was fully functional and had achieved a high level of usage.

0xNic

ov3rkoalafied Appreciate the feedback and good questions!

I guess some of that comes down to more of an internal question of what you guys want the Alchemix grants to be? Are they a tool to take a bet on and support early stage projects, encourage experimentation and exploration of what could be built with Alchemix and where the grants can make the most impact? Or are they more supposed to be a retroactive reward for people who have built on Alchemix and have already proven success on their own.

I know the grants program is still very new and you probably need to figure out yourselves what the exact philosophy behind it will be and who and what qualifies, just wanted to point out that that's not very clear yet from the outside. I also wasn't aware that stables was even an option for example, I was under the impression it was purely ALCX before.

Regarding your question about additional funding:
Well, first of all, we're running our own Fair Funding campaign on the platform of course! 🙂

Unstoppable is also building other revenue generating products over the next year and we will be able to cross finance any further development for the Fair Funding platform as needed. There is also going to be the option (but not obligation) for projects using the platform to give back a percentage of the raised funds.

I'm confident, that in half a year we will be in a very different situation and not rely on any further grants to continue building at the highest level.

We really wanted to do things right and not compromise on our principles with Unstoppable.
We had predatory VC offers that were abusing the current market situation and our early stage where we could have gotten funding, but we told them to f**** off.
We chose not to do a tokensale to users before we have revenue because we believe it's the right thing to do.

That does put us now in a more difficult situation at the beginning but we believe it's worth it.

So to answer your question, while right now a grant would have a huge impact and help us tremendously, as soon as we are over that initial hump and a bit further into our own development, we will not need further grants to continue building. In fact we definitely plan to pay it forward and support other young and hungry projects as soon as we are a bit more established ourselves.

0x7d54

Supportive of this - and great potential partnership! I'm just going to add something here that I mentioned on the fireside. Specifically, that for the grant we should consider using Alchemix itself in a win-win way. e.g. if $50k is requested, then we take $100k from the Alchemix treasury, deposit in Alchemix, borrow 50k alUSD, and send that 50k alUSD to Unstoppable. Then, it's an automatic self-repaying grant, further boosts volume and revenue coming through our vaults, and helps further demonstrate the power and use cases of our protocol. (note: could do the same thing with ETH/stETH and alETH in equivalent amounts, if we choose).

ov3rkoalafied

0x7d54 I think we've avoided this so far just because our stablecoin holdings have never been huge (we tend to hold more eth), so we haven't had the capacity to do 50% efficiency (ie, very likely we'd need to liquidate not long after). But I think this is a small enough use that it could be a fantastic first use-case for us depositing in Alchemix. esp cuz we haven't yet, I think that's an easy thing for other DAos to be like "why should we if you haven't even done it!"

ov3rkoalafied

Note this proposal was voted on here: https://snapshot.org/#/alchemixstakers.eth/proposal/0xbf0dbd665bf5fcd543ca058aee00dff1c4617313e7a931747bdc75ef4e812dc8

It did not meet the newly imposed quorum of 50k ALCX. Given the quorum is new, and notification was late, it has been sent to a revote here: https://snapshot.org/#/alchemixstakers.eth/proposal/0xdbf25b14d5deb2fd37a74f4704a7ce43bc3312ed1e593b3747bfd837a4ab2fa4