This article is devoted to PowerPool recent developments, results, and future plans for 2021
Abstract
After the first five months of 2021, we want to take a moment to summarize and reflect on a number of the achievements that we’ve had thus far. As always, we have been heads-down focused on developing new tech: Dynamic AMM (DAMM), ZAP, research and simulations, PowerOracle v2, and underlying assets staking, to name a few. We also released two structured investment products — $ASSY and $YLA during this time.
Along the way, we continued to establish and nurture lasting relationships and integrations with great partners such as Yearn, Balancer, 1inch, and Wintermute.
Our community has been incredibly active, engaging with the team and each other, across our official Discord server, Telegram, and Twitter. This has led to spirited and thoughtful discussions in our governance forums resulting in our users bringing 24 proposals to vote. The protocol was used by 10,000 unique wallets.
PowerPool treasury peaked at $1,150,000 (currently after correction value of assets in the treasury is ~$650,000). The treasury is mainly composed of 31 ERC20 tokens collected as fees (enter fee, exit fee, swap fee). According to the xCVP proposal approved by the community, a fees stream will be used for rewarding CVP stakers by means of xCVP.
Let’s dive deeper.
New Products
Two new structured investment products were released in 2021.
ASSY
Initially proposed by Marc Zeller of Aave, ASSY is a concentrated bet on four leading Defi protocols: Aave, SushiSwap, Synthetix, and Yearn. It is the first product operating using the recently developed Dynamic AMM (DAMM) mechanism.
Currently, SUSHI is staked using the Wrapper + Router system (see description below).
Current TVL: $2,800,000
Price per ASSY: 1.87 (+87% YTD)
YLA (Yearn Lazy Ape)
Yearn Lazy Ape is a cash-flow generating index composed of five Yearn stablecoin Vaults LP tokens (crvGUSD, yCRV, crvYBUSD, crvCOMP, and 3Crv). Each Vault LP token accumulates interest over time in stablecoins. YLA offers diversified exposure to Vaults in a single token with cheap supplying/withdrawal of liquidity by means of ZAP solution.
YLA FAQ infographics: https://twitter.com/RazaviAria/status/1392109748435263494/photo/1
Current TVL: $9,477,000
Financial indicators & statistics
PowerPool treasury currently has ~$650,000 holdings peaking at $1,150,000 before the market correction. It is mainly composed of 31 ERC20 tokens collected as protocol fees from PowerPool products (entry fee, exit fee, swap fee). Treasury and future fees stream will be used for rewarding CVP stakers.
Up to date, PowerPool products were used by more than 10,000 unique wallets. PowerPool TVL peaked at ~$30m in 2021 and currently is ~$17.7m.
New tech
Dynamic Automated Market Maker (DAMM)
A DAMM is an AMM that changes parameters according to external or internal triggers (e.g. market cap) and certain strategies. Currently, this tech is already utilized by the $ASSY index, and it’s planned to activate it for $YLA.
We decided to use Dynamic AMM with a goal to optimize capital gains of LPs in PowerPool products. Particular strategies and their implementation are presented in this article.
Read more about our underlying DAMM tech here.
ZAP: saving gas costs for PowerPool users
In recent months Ethereum fees were quite expensive for ordinary users. For decreasing the cost of PowerPool usage we developed a special solution — ZAP.
Zap works like this: once every 24 hours or when the 500k USDC threshold is reached the PowerOracle v2 Poker Agent, calls the ZAP contract, the ZAP then efficiently deposits users’ funds into the index.
Manual supply with USDC into $YLA requires 20 transactions. ZAP automates all of them and requires only two transactions from end-users — approval for spending ERC20 token and an ERC20 transfer into ZAP. On average, this saves users up to 98% of gas fees.
Wrapper and Router: flexible staking of underlying assets
We have developed a Wrapper and Router system to allow PowerPool pools to stake assets in external protocols for generating additional yield. Tokens used in external protocols are stored on the Wrapper contract, while the original pool composition is presented by ppTokens (wrapped tokens):
This design allows the Router contract to change asset management strategies without affecting the main pool seamlessly, without any involvement from LPs.
This approach in the case of SUSHI staking entirely differs from using xSUSHI directly in the pool — in case of changing strategy, the pool should be re-deployed or somehow substitute xSUSHI by another derivative SUSHI LP token. It is complex and could seriously affect the LP experience. In the case of PowerPool wrapper and router strategy switching wouldn’t affect LPs at all and the pool will work further with a new strategy without re-deployment.
PowerOracle v2
PowerOracle is a system responsible for maintaining PowerPool products in a decentralized and permissionless manner. The core element of this system is Power Agent — an agent executing all on-chain smart-contract calls necessary for the operation of PowerPool structured investment products. This agent is selected based on CVP staking and therefore has skin in the game. Contract calls include updating TWAP (Uniswap, Sushiswap) oracle price feeds, execution strategies of dynamic weights changing in AMM pools by calling controlling contracts, strategy contracts, and pool contracts.
The PowerOracle system is a core of the Unlimited ETF product — a flexible AMM pool that can change weights according to various triggers and strategies.
PowerOracle v2 automates the operation of Dynamic AMMs developed by PowerPool and will be used for managing weights in Balancer v2 Dynamic AMM pools launched on top of PowerPool tech.
Partnerships and integrations
Yearn.finance
We started our relationships with Yearn in late 2020 by launching YETI (Yearn Ecosystem Token Index). Shortly after that @milkyklim, core Yearn developer approached our governance forum with the exciting idea of creating a “fund of funds” for Yearn stablecoins vaults. In his opinion, such a structured investment product could offer diversified exposure to Yearn vaults with automating routine procedures such as composition adjustment and joining/exiting Vaults.
In April we launched YLA. For simplifying the user experience and saving gas costs, we developed a ZAP solution that costs users only ERC20 transfer and approval for deposit into YLA (gas for the main operation is subsidized by CVP treasury). Also, it allows for a one-click deposit into YLA via the ZAP feature directly from the Yearn website! This was crucial for exposing a valuable PowerPool product to the wider Yearn audience. Recently, YLA was migrated to v2 Vaults.
Yearn Lazy APE is a market-neutral product allowing to generate yield without exposure to volatility risks: the position is composed of stablecoin Vaults and generates income in stablecoins.
Balancer v2 launch partner
We are thrilled to be one of the first launch partners of Balancer v2. PowerPool aims to launch Dynamic AMM pools on top of Balancer v2 and become an asset manager for the Balancer ecosystem.
PowerPool aims to provide tech for the launch of Dynamic AMMs pools for other Balancer v2 ecosystem participants. Additionally, we plan that other v2-based pools would be able to use token staking (yield generating) strategies developed by PowerPool.
1inch
1inch has integrated ALL of our pools, including YLA, for order routing to allow our LPs to earn additional revenue from swaps inside the pools. You can check it out at 1inch.exchange dApp.
Recently CVP Community supported 1inch by delegating AAVE votes to assist in getting them to list 1INCH token as collateral. We did it via a community vote — Meta-Governance in action.
Wintermute
Wintermute is one of the most recognized market-makers in the crypto space. We are happy to have such a team on board as an official $CVP market maker and product advisor. We appreciate their view on building institutional-grade investment vehicles, and we are incorporating their feedback in our future products.
The Wintermute team approached the Community Forum and issued an official proposal which was approved by the CVP community.
Other integrations
PowerPool products were integrated into Zapper and other DeFi UI/UX integrators.
Research
In December 2020 PowerPool community co-funded (together with Balancer Labs) the Balancer initiative for building the Balancer v1 cadCAD Python model. This grant was executed by the Token Engineering team. The developed model is suitable for simulating AMM-based products, including Dynamic AMMs.
Information about the Balancer v1 model and research roadmap: https://medium.com/balancer-simulations/introducing-balancer-simulations-c0e2807709b8
Our R&D division is working on Dynamic AMM simulations right now and actively participates in Balancer Simulations Group providing research questions. PowerPool is an ecosystem partner in this group.
Governance & Community
In 2021 CVP community voted on 24 governance proposals.
From the management side, the PowerPool community elected a Management Board, responsible for helping with strategy, content creation, research, and other activities. The management board published a report covering their contribution for March 2021. It includes BSC Index composition, PIPT v2 composition, and governance proposals — most important was related to updating allocations on testers’ tokens. As a result of this upgrade, testers’ vesting contract was re-deployed and ~9.6M $CVP in the old contract was burnt.
Recently we ran a creativity contest, where we received an outstanding set of content:
Future plans & project vision
Last month we worked on the new project vision. Now we finished the first draft and wiki with several supporters from the community.
This vision extends the idea of smart structured investment products and also offers a new DAO structure in PowerPool with teams dedicated to particular working areas.
If you are a long-term PowerPool supporter and want to participate in discussions regarding new vision and future products, please reach out to powerpool.official@gmail.com. We will be happy to have you on board!
