Conic v2: A New Hope

Conic v2 is coming — voting has concluded and the v2 launch proposal has passed with overwhelmingly strong support from the Conic DAO. With many new features and several key changes, here’s what you need to know ahead of Conic’s imminent v2 launch.

Read the original v2 launch proposal here.

Liquidity Allocation Modules (LAMs)

Conic v2 introduces support for liquidity allocation modules (LAMs). A LAM contains the logic for allocating the liquidity of an Omnipool. In Conic v1, all liquidity was allocated to Curve and staked on Convex. This is the Curve&Convex LAM, which will also be used by default in Conic v2. However, in Conic v2 Omnipools may contain multiple LAMs as demonstrated by the following examples:

• An Omnipool could contain a LAM that supports non-Convex based rewards (e.g., PRISMA).
• LAMs could be added to diversify Omnipool liquidity to other protocols.
• Another example of a LAM supported feature could be peg-keeping as a service with crvUSD.
• New LAMs can be added by the Conic DAO via CIPs.

Bonding

At launch, Conic v2 will support the ability to bond crvUSD Omnipool LP tokens (cncCRVUSD) in exchange for vlCNC. Bonding will be enabled for the first 52 weeks post launch and is characterized by the following features:

• Each week (epoch) there is a fixed amount of vlCNC allocated to bonding.
• As time passes in an epoch, a linearly-increasing discount gets applied to the amount of vlCNC that users can receive in exchange for cncCRVUSD LP tokens.
• The received cncCRVUSD LP tokens get staked on Conic to earn CRV and CVX before gradually being streamed as rewards to vlCNC holders.
• When users bond they can decide how long to lock their CNC for (i.e., 4 to 8 months). The longer the lock duration, the higher the boost a user receives on their locked CNC balance. The boost is applied to the streaming of cncCRVUSD.

Platform Fees

Conic v2 will launch with a 10% platform fee enabled. These fees will be charged on CRV and CVX earned by an Omnipool. Initially, 100% of platform fees will go to the debt (reimbursement) pool. After one year, governance may redirect this fee to vlCNC holders as well. Note that fees (incl. earnings from bonding) will only be paid to vlCNC holders that migrate their CNC to the new vlCNC locker.

Locker Migration

Conic v2 will use a new version of the CNC locker. This is due to additional logic that is needed to stream rewards to vlCNC holders other than CRV and CVX (e.g., such as bonded cncCRVUSD). Hence, on launch, the existing locker will be shut down, allowing all locked CNC to be withdrawn. The re-locking will be facilitated via the Conic UI.

Airdropped vlCNC Boost

Lockers (i.e., holders of vlCNC) that had CNC locked at any time since Conic v1 was paused will receive an airdropped boost on their vlCNC balance. Airdropped boosts can be utilized in the following manner:

• Can be claimed and applied when relocking in the new vlCNC locker.
• Applied only once to a single lock.
• Claimable up to 6 months post v2 launch.
• Earnings from bonding will be paid out to vlCNC holders using their boosted balance.
• The airdropped boost amount will be based on users’ vlCNC balance in the current locker (taking into account historic CNC amount locked and lock time boost).

Reimbursement Plan

Conic v2 will enable platform fees, which will be fully allocated to the debt pool for the first year. Additionally, all CRV/CVX/CNC rewards earned from staking unclaimed cncCRVUSD LP tokens will be allocated to the debt pool. LPs that were affected by the exploits will receive Conic debt tokens that can be redeemed for funds that accrue in the debt pool or exchanged on secondary markets. Eligible LPs will be able to claim and redeem their debt tokens via the Conic UI upon v2 launch. The parameters for debt token claiming and tokenomics are outlined as follows:

• Total supply: 4,337,233
• 6 months claim period
• The claimable amounts of debt tokens (i.e., affected users’ share of the debt pool) are based on the USD value lost at the time of exploit.
• As users claim debt tokens, the total supply will increase, reducing the exchange rate in the debt pool. Conversely, as users redeem debt tokens, the total supply will decrease, increasing the debt pool exchange rate.

CNC Inflation

On August 2nd, as per the results of a DAO vote, CNC emissions to Conic Omnipools were paused. CNC inflation will be re-enabled upon v2 launch. The inflation schedule will continue where it left off when it was first paused.

Guardians

Guardians are whitelisted addresses that are able to temporarily pause an Omnipool. When an Omnipool gets paused, deposits to the pool are disabled. Withdrawals are never disabled. There is no time delay on pausing an Omnipool. If an Omnipool is paused, it gets automatically unpaused after 8 hours. However, guardians can extend this pause by an additional 8 hours if they call pause again. This feature adds an additional security layer that should allow for quick response times in case there are ever any issues. Conic v2 will launch with the following individuals as guardians:

• Michael Egorov (Curve)
• c3p0 (Conic)
• Wicket Warrick (Conic)
• r2d2 (Conic)
• General Grievous (Conic)

Any additional Conic guardians, or revisions to existing ones, will need to pass via a governance vote and should be active members within the Curve ecosystem.

Conic Delegates

Conic v2 will enable vlCNC holders to delegate their voting power to another address. Delegation will be easy and can be done in a few clicks on Snapshot. Anyone can become a Conic delegate and the Conic core team will setup a delegate address upon launch.

Flash Loan Restrictions

A rather uncommon design decision that has been taken was to disable the usage of Conic with flash loans. Conic v2 does not allow smart contracts to deposit and withdraw in the same transaction unless the smart contract gets whitelisted via a governance vote. Note that rebalancing still allows for the use of flash loans.

Post Launch

Conic v2 will soon be launching with the above new features and parameters in place. Following v2 deployment there are a few key points the Conic DAO should keep in mind:

• The first LAV will take place 3 weeks after launch.
• Rebalancing rewards will be disabled by default when Conic v2 launches. A DAO vote will be required to enable these for a given pool. Votes will most likely occur 4–6 weeks after v2 launch (subject to an Omnipool’s TVL).

Governance has and will continue to be critically important to the growth and success of Conic. To get involved with the community and to participate in DAO discussions join the Conic Discord.