The long-awaited feature for the ASSY pool is finally audited and prepared for deployment
ASSY is the first Dynamic AMM pool that will use tokens in external protocols for receiving an additional yield on pooled capital. It will provide additional income for LPs.
The first token from ASSY (AAVE SUSHI SNX YFI) that will be used for staking is Sushi. It will be staked into xSushi, and all mined Sushi tokens will be added to the ASSY pool, benefiting LPs.
How does it work: Wrapper + Router architecture
The principal scheme of the Dynamic AMM pool which can use assets for yield-generation in external protocols is presented below:
Disclaimer
The system for using assets in external protocols is built on a Balancer v1 fork (when we started to build it Balancer v2 wasn’t available). However, PowerPool asset manager for Balancer v2 will use similar architecture so our users can consider it as an MVP implementation prior to v2 migration.
Usage of assets in external protocols is based on using Wrapper + Router architecture: tokens that are used in other protocols are wrapped using Wrapper contract. While ppTokens are in the main pool, original assets are transferred to the Router contract. Router contract deposits tokens into the contract where they can generate yield (for example, xSushi in case of Sushi token). All mined Sushi is transferred to the pool, increasing the capital of LPs.
The main feature of this approach is that the pool doesn’t have xSushi in composition, but has ppSushi. It offers great flexibility for asset management in the pool in comparison with direct usage of xSushi.
Wrapper contract: https://etherscan.io/address/0x43fa8ef8e334720b80367cf94e438cf90c562abe
For swapping assets using the pool users will need a wrapper contract. The PowerPool interface will integrate all these changes; 1inch integration will be updated soon.
Advantages of using Wrapper + Router
Wrapper + Router architecture allows seamless changing of asset management strategy, for example unstake Sushi from xSushi and stake it in another Vault. This operation wouldn’t affect the experience of LPs and traders.
In contrast, a pool using xSushi directly in its composition will require re-deployment with new token composition in case of changing vault for Sushi staking. Even using other possible approaches for fixing this issue, will be a complex task affecting pool operation and LPs experience.
Wrapper contract automatically wraps tokens in case of joining the pool and unwraps tokens in case of swap via the pool or exiting the pool
For staking opportunities with a cooldown period that prevents unstaking on-demand Wrapper contract will hold some amount of base assets not staking for fulfillment pool swaps. The reference case is staking AAVE into the AAVE safety module (note — AAVE is the next asset for staking implementation in PowerPool).
We will make an additional announcement on Twitter prior to deployment. Stay tuned.
