Hi everyone! My name is Matt Lam and I head up operations with Vesper Finance. We wanted to share a proposal for a joint grant / bounty ($100K worth of COMP contributed for grant).
Would love to hear the community’s input!
Summary: A Better Partnership Lending Model (“happy forks”)
The problem: Today’s DeFi lending market is challenging for new tokens. On one hand, seasoned tokens may approach Compound via its risk adjusting process, and become available to users for supplying, borrowing, and collateralizing. The best paths for the “other 99.9%” of tokens is either forking Compound, or using innovative new isolated-lending-pairs at Sushi(Kashi) or Ruler. These alternatives do not provide tokens with a robust collateralization ability in a reasonable time-to-market timeframe.
Our proposed solution: Deploy and demonstrate a software template for Compound partnerships which deploys a fork of the Compound codebase that is (1) economically linked to COMP, yet (2) risk-sandboxed such that risky tokens do not transfer negative impact back to the core Compound lending platform.
Looking for a Compound-knowledgeable engineer or group who can deploy the Compound smart contracts + write a wrapper contract as described below.
Outcome: A true Vesper/Compound partnership, the DeFi Way: through composable smart contracts.
Purpose
Decentralized Finance is a groundbreaking industry that enables users to leverage their capital in ways not accessible to them under the TradFi framework. Vesper recognizes the immediate and long-term impact of DeFi, and offers an easy-to-use, hands-free experience that anyone can use for exposure to DeFi.
Today, Vesper operates as a yield meta-aggregator for top crypto assets (ETH, USDC, WBTC, LINK, DAI, USDT, UNI). Users can deposit these assets to Vesper and enjoy auto-compounding returns as their funds are routed to the best yield opportunities in the space.
Several Vesper Pools take advantage of strategies that route through Compound. Vesper Island is a friendly Compound fork, intended to be a new DeFi primitive under the Vesper banner that creates a broader selection of tokens that can be utilized in peer-to-peer lending.
Vesper Island adheres to the same standards as the flagship Compound market: a permissionless, peer-to-peer lending platform protected by over-collateralization of positions and automated liquidations on underwater borrowers.
The successful launch of Vesper Island enables Vesper to support more ERC20 tokens through integration into the lending platform with a faster time-to-market. This is particularly worthwhile for tokens that otherwise are not integrated into major DeFi platforms and therefore are unable to generate meaningful yield.
For Compound, this proposal provides an innovative new model for Compound partnerships. It creates a new market and incorporates a new audience under the Compound umbrella that will contribute TVL and generate revenue for the Compound ecosystem.
Additionally, this notion of a Compound “satellite” lending market can introduce a new set of products, with other projects like Vesper creating their own markets. This is a highly scalable model that could translate to sustained TVL growth and consistent revenue gains for Compound as more and more independent communities seek to build out their own “authorized” spinoffs of the flagship lending market.
Vesper Island utilizes a fork of the Compound lending contracts governed by vVSP holders. As this product is positioned firmly within the Vesper ecosystem, it’s important that it is owned and operated by community members who make up said ecosystem (a la vVSP). This is advantageous for COMP holders too: they reap the rewards of an additional market without taking on the burden of managing said market.
tl;dr Vesper Island = Compound fork, governed by VVSP, with a special wrapper that deposits Compound-listed assets on the Compound platform.
Framework
Scope
| Target | Type |
|---|---|
| https://github.com/compound-finance/compound-protocol | Smart Contract |
| https://app.compound.finance/ | Demonstration Front End |
Scope: Smart Contracts
User story: As with Compound, Vesper Island (“VI”) users may supply, borrow and collateralize based on a list of whitelisted assets. Beginning list: Compound list (see “wrapper”, below) + VSP, VVSP, VUSD, and other Vesper pool tokens.
User story: Liquidations may occur, per familiar liq rules.
User story: Price oracles may be Compound open oracles or TWAP on-chain price oracles.
User story: Governance via the VVSP token (0xbA4cFE5741b357FA371b506e5db0774aBFeCf8Fc).
User story: For assets listed on Compound, supply and borrow occur as shown in the Framework graphic, utilizing a wrapper.
Compound’s primary product encompasses their on-chain, peer-to-peer lending market. The market enables users to permissionlessly post assets and take loans via over-collateralization of other crypto-assets (IE: Post 200 USDC and receive $100 worth of $ETH). When loans go underwater (ie: ETH doubles in value) the collateral is liquidated on-chain, ensuring that the lender is never at risk of losing their capital.
The protocol is governed by COMP tokens. Token holders can vote to incorporate new assets, removing existing, and modify lending terms (revenue draw, minimum collateral requirements, etc.).
Vesper Island will fork the protocol and, targets the following deliverables from the grantee:
- Author, test and deploy a c-token wrapper. See Framework graphic, above.
- Deployment of Compound lending platform and governance module, per above user stories.
- Demonstration UI
Scope: Demonstration UI
It is assumed that the Vesper team will develop a fully branded and integrated UI, separate from this bounty.
For this bounty, the goal and requirement is a minimum UI that sufficiently demonstrates the smart contract deployment is working for basic lending functions. Liquidations UI and governance UI are nice-to-have but not required for visually demonstrating that Vesper Island is working. Vesper DAO will host and operate this as a beta-test UI until Vesper’s UI is available.
Grantee Qualifications and Rewards
This is a binary, all-or-nothing bounty for the full purse to the first individual or group who successfully provides all aspects of the bounty required.
The ideal candidate or group has experience with Solidity, Ethereum smart contract deployment, the Compound lending & governance smart contracts, deployment of the Compound smart contract complex, and a web UI that interacts with the Compound lending & governance smart contracts.
Amount of bounty: $100,000 COMP + $100,000 VSP - $20,000 deployment audit = US$180,000 total bounty. The COMP & VSP token amounts are fixed at the time of the COMP grant allocation.
Deliverables:
- C-token wrapper that produces the outcome illustrated in the graphic, economically connecting Vesper Island to Compound by tunnelling supply & borrow.
- Deployment of “Vesper Island”: A full, fresh and separate deployment of the Compound lending platform, including c-token wrapper, governed by the VVSP ERC20 token.
- A temporary demonstration UI sufficient to demonstrate the live-mainnet deployment of Vesper Island.
Vesper will fund and provide external source code and deployment audits, in part using $20,000 of the $100k COMP grant.