[AIP-89] Expand Vesper Vault Offerings

greenjeff

Summary

Expand the relationship between Alchemix and Vesper to incorporate Vesper L2 and LSD products with the intention of continuing to prioritize one another through synergistic buildouts into the future.

Proposal

Authorize Mainnet Vesper stETH and rETH pools as Alchemix alETH vaults with deposit caps of 250 ETH each.
Authorize Optimism Vesper USDC and wstETH pools as Alchemix alUSD/alETH vaults with deposit caps of 500,000 USD/250 ETH, respectively.
Each pool will carry the following variables:

Ethereum stETH

maxLoss() of 200 bps (based on stETH to ETH price)
harvest() threshold of 0.5 ETH
repay() threshold of Infinite per 10 min
liquidation() threshold of Infinite per 10 min

Ethereum rETH

maxLoss() of 200 bps (based on rETH to ETH price)
harvest() threshold of 0.5 ETH
repay() threshold of Infinite per 10 min
liquidation() threshold of Infinite per 10 min

Optimism USDC

maxLoss() of 5 bps
harvest() threshold of 250 USDC
repay() threshold of 500,000 per 10 min
liquidation() threshold of 500,000 per 10 min

Optimism wstETH

maxLoss() of 200 bps (based on rETH to ETH price)
harvest() threshold of 0.25 ETH
repay() threshold of Infinite per 10 min
liquidation() threshold of Infinite per 10 min

Additionally, the protocols will continue to strategize and collaborate on future endeavors.

Background/Motivation

Several Vesper pools (DAI, USDC, ETH) were incorporated into Alchemix over recent months. In particular, the USDC pool has gotten good engagement from depositors due to our higher APY offered.

After discussing with the Alchemix team and learning about upcoming developments and focuses, we believe there are two areas where Vesper and Alchemix can continue to cooperate in the immediate future: LSDs and L2’s.

Vesper offers an interesting product on top of LSDs: We support the major players (stETH, cbETH, rETH) in our Vesper Grow pools. This product provides what we like to call “APY+” - depositors of these tokens keep 100% of their staking APY plus extra yield generated through DeFi activity (ex: borrowing stablecoins from Aave and LPing them onto Curve).

We believe these pools are exciting for Alchemix due to a premium APY offered without carrying too much extra risk - we avoid LPing the LSDs outright to avoid IL and the strategies used only expand to the blue chip protocols that other Vesper pools interface with.

Additionally, we can help to drive engagement through L2’s like Optimism and Arbitrum due to our ability to spin up yield sources in a way that is feasible for both Vesper and Alchemix from an engineering perspective (Alchemix already built the Vesper adapter. Vesper can fork mainnet strategies/pools freely).

Beyond that, our ability to capture grant funding could offer highly competitive total yield to Alchemix users.

Future Opportunities

In addition to the above, there are a number of opportunities where Vesper (and our sister protocol, Metronome) can further create exciting products for Alchemix, particularly surrounding the miscellaneous alAssets:

Vesper can offer alUSD and alETH pools, which can provide LP and compound yield through Curve/Convex/Frax.
Those alAsset Vesper pools can be incorporated as collateral onto Metronome, allowing users of these pools to participate in looping yield strategies.
Synthetic Metronome assets (msUSD and msETH) can be paired with alAssets as LP pools for co-incentivized liquidity opportunities.

Once market conditions improve, and TVL increases, Vesper also offers a partner revenue share program which can drive additional revenue to Alchemix (so far, current TVL translates to negligible fees, but higher TVL drives revenue directly & enables higher revenue sharing).

Voting

Aye: confirm the specifications above
Nay: do nothing

Soleman02

Should do a better job citing the risks or downsides to something like this. It seems like an obvious extension of the partnership (and maybe it is) but is there any downside?

ov3rkoalafied

Soleman02 It takes dev resources to launch strategies, ie time spent on these could mean someone doesn't get a diff strategy they want. There are risks with integrating a new protocol but Vesper has a strong security track record throughout their existence. Ultimately we shouldn't just put every yield strategy out there - as every yield strategy requires deployment, then keepers to manage harvests (which costs $$ esp on mainnet), and adds risks, but I believe Vesper is pretty obvious and this was just a matter of ensuring it was feasible to incorporate their strategies (which devs have verified it is).