Proposal “renDash-integration-liquidity-mining“ (Completed)Back

Title:renDash integration and liquidity mining campaign, Dash on DEX
Owner:Dash-DeFi
One-time payment: 333 DASH (71958 USD)
Completed payments: 1 totaling in 333 DASH (0 month remaining)
Payment start/end: 2021-02-12 / 2021-03-14 (added on 2021-02-18)
Votes: 763 Yes / 32 No / 0 Abstain
External information: app.dashnexus.org/proposals/rendash-integration--liquidity-mining-campaign/overview

Proposal description

Summary
We propose  to create a wrapped DASH asset on Ethereum using the most decentralized approach available - integration with the Ren blockchain and protocol.  This proposal is to cover the development and liquidity mining costs required by Ren

This integration is the result of positive feedback from the community, and it is a unique new proposal approach as it is a combined effort of the two DFOs Dash Incubator and Dash NEXT making such integration possible.
Dash can create additional value propositions by integrating them into the fast-growing DeFi space. The first essential building block to achieve this is to create a wrapped asset - an ERC-20 version of DASH - that can be used in the Ethereum ecosystem and easily adapted to other ecosystems such as Binance Smart Chain. We see huge potential for new partnerships, use cases, options for our users, and new possibilities for devs to build on Dash Platform. Moreover, this initiative is bringing Dash to decentralized exchanges for the first time. This will likely increase trading volume significantly, increase demand for Dash, and have the potential to address new user groups. In short, it pushes Dash to new horizons.

After months of conversations with Ren, we are now in the pipeline for the next round of integrations expected in Q2/2021; but the creation of renDASH comes with a few requirements from Ren. 

First, we are responsible for building a bridge between Ren and Dash.  Second, we are required to fund a liquidity mining program to ensure a successful launch of renDASH at a decentralized exchange by incentivizing users to become a liquidity provider (LP). The plan here is to initially launch the trading pair renDASH/renBTC. We are aiming to do this at the largest DEX, Uniswap. Having the pair enables users to swap one asset to another, it is key to have enough liquidity, meaning we need users to lock renDASH/renBTC in a 50:50 ratio into the Uniswap pool. The way to do this successfully is to incentivize users to provide funds.. This is called yield farming or liquidity mining. Ren requires 50,000 USD worth of liquidy from all projects that integrate with them.

Value proposition of wrapped Dash
Several teams within the Dash ecosystem have begun to explore the value DeFi can bring for Dash. Feel free to check out our latest blog posts at Dash Incubator regarding the potential of a wrapped Dash and the use of decentralized oracles to fuel Dash’s further growth. 

To summarize, there are many reasons why a wrapped asset is beneficial for Dash.
  • From a business perspective, Dash on other chains such as Ethereum offers many new potential partners in the Ethereum and other Blockchain ecosystems. In fact, many partnerships around lending, borrowing, yield farming, liquidity pools on different exchanges and protocols or a Dash backed stablecoin are already in the making but waiting for a wrapped version of Dash. As the DeFi space is growing rapidly, we can also expect many new business opportunities in the near future.
  • From a user perspective, a wrapped Dash increases Dash’s utility and visibility. The new partnerships and integrations will provide users with more options and flexibility, fueled by decentralized finance. Users will be able to collateralize Dash, borrow against it, stake Dash to earn yields, provide liquidity to automated market makers (AMMs), and many more. Users will be able to additionally use Dash in a new decentralized fashion.
  • From a trading and investors perspective, a wrapped Dash has the potential to fuel the market sentiment on Dash and promise real value. First of all, renDASH enables us to be listed at decentralized exchanges that have taken off massively since 2020. One of the key value propositions of those DEXes is that users can earn trading fees generated from exchange fees in return for providing liquidity to trading pairs. Furthermore, as renDASH is pegged 1:1 to DASH, we can expect new arbitrage opportunities from price differentials between different DEXes and from price differentials between centralized and decentralized exchanges.
  • From a marketing perspective, we will be able to tell great new stories and create new narratives around the topics mentioned above. Furthermore, every new partnership gives us the opportunity to create marketing campaigns that multiply our reach to other communities.
  • From an ecosystem perspective, we expect great benefits for the Dash Platform. What we want here is to excite and incentivize developers to build on Platform, to come up with new ideas, or to leverage platforms for their own projects, regardless of which platform they are building on.  The amount of Ethereum and DeFi developers is enormous.  Having Dash participate in this space means many more developer eyes on Dash.  Many should be curious enough to look at what Dash Platform and projects like Dash Incubator have to offer.  Additionally, we are already exploring use cases around Dash’s decentralized API and blockchain-based cloud storage to make DeFi more efficient and effective, and invite everyone to come up with new ideas.
Why renDash?
There are different ways to create a wrapped asset. What all of them have in common is that in order to issue a wrapped Dash, an original Dash has to be locked away. A key question is how custody is designed within the system. While many wrapped assets rely on centralized third parties to custody assets (e.g. wBTC through BitGo), Ren is designed as a decentralized, trustless, and permissionless custodian. Details can be found in this blog post and this video.

One advantage of this design is the speed at which assets can be swapped back and forth without going through onboarding or other third-party procedures. Apart from its huge community and a great reputation, Ren’s solution has been tested and assets have been proven successful, and many other projects are actively seeking integration. The best example is renBTC with a market cap of over $850m, ranking 75th in market capitalization on Coingecko at the time of writing this proposal.

Integration plan
Detailed requirements as provided by Ren can be found here. The expected integration timeline is in Q2/2021 and has to be done by Ren. 

Together with Dash Incubator, Dash NEXT has established the requirements, budget, and tasks for the REN integration from our side.

To summarize the requirements provided by Ren:
  • Complete the Multichain pull request (PR): https://github.com/renproject/multichain. This has already been completed by dashameter’s PR
  • Agree to a binding $50k USD for liquidy mining to ensure proper liquidity bootstrapping within DeFi. This is to inceltivize liquidity providers to kickstart the liquidity pool on an AMM of our choice with a renBTC/renDASH pair. We are planning to start with Uniswap and are evaluating other options such as Sushi.
  • LP staking UI to enable users easy access to the yield farming program
  • Destination blockchain (L1) agrees to create and maintain a fully functional RenBridge like UI for users (prior to release). We can simply fork RenBridge as needed, or utilize RenJS.
  • A marketing campaign for the launch of renDASH that includes a blog post and shared announcements within Ren and Dash communities.
How will we use the funds
  1. We are asking for 50,000 USD worth of DASH plus a buffer of 10% to avoid price movements for liquidity.
  2. Dash NEXT is handling custody of the funds provided by the DAO until REN requires us to provide funds for the liquidity farming . Dash NEXT will exchange Dash worth 50k USDT on the same day that funds are transferred to the Dash payout wallet. The rest will immediately be transferred to the Dash Incubator wallet:XbFb9b1qaoLykngDbUwBVBFwSHuwQRhSqc
  3. If Dash price rises, additional funding above the USD 50k + 10% buffer level will be sent to Dash Incubator as additional funding for their development, if the Dash price falls below the USD 50k - 10% buffer, a second proposal would be raised to make up the difference under the same terms.
  4. The costs for developing the integration are added to the proposal ask, and deposited to the Incubator wallet upon receipt.  They will manage the implementation as bounty tasks.  Costs will include an additional 20% management fee, which covers the Incubator’s project admin and QA activities.

Risk Mitigation
There is always a risk that integration may not work out as planned. If for any reason the integration does not happen as planned or if the integration is not done by end of Q4/2021, the funds from this proposal will be transferred to Dash Incubator and made available for funding of their development projects. 

As always, we are happy to hear your feedback!

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Discussion: Should we fund this proposal?

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3 points,7 days ago
Thanks for all the comments, support and positive feedback.

As multiple questions came up around the topic: why the DIF or DCG are not handling the custody, we wanted to clear that point again below: The Dash Next team got of course in contact with both Dash entities to discuss a custody solution, but time pressure reasons, a great price momentum and available funds within this cycle didn’t allow us to proceed that way and we all decided that under the circumstances it’s the best that Dash Next is handling the custody for that one time. The way how we handle the custody is already explained in the proposal text under “HOW WE USE THE FUNDS” but please see below again:

1. We are asking for 50,000 USD worth of DASH plus a buffer of 10% to avoid price movements for liquidity.
2. Dash NEXT is handling custody of the funds provided by the DAO until REN requires us to provide funds for the liquidity farming . Dash NEXT will exchange Dash worth 50k USDT on the same day that funds are transferred to the Dash payout wallet. The rest will immediately be transferred to the Dash Incubator wallet:XbFb9b1qaoLykngDbUwBVBFwSHuwQRhSqc
3. If Dash price rises, additional funding above the USD 50k + 10% buffer level will be sent to Dash Incubator as additional funding for their development, if the Dash price falls below the USD 50k - 10% buffer, a second proposal would be raised to make up the difference under the same terms.
4. The costs for developing the integration are added to the proposal ask, and deposited to the Incubator wallet upon receipt. They will manage the implementation as bounty tasks. Costs will include an additional 20% management fee, which covers the Incubator’s project admin and QA activities.

We believe especially point number 3 is important regarding most concerns.
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0 points,6 days ago
I will assume these are stupid questions, but here goes...

1. There will be some kind of legal agreement between REN and Dash Next?

2. There is going to be potential profits from the "liquidity farming" and that potential profit becomes an independent income stream for the Dash Incubator and DashNext?

3. If the "liquidity farming" creates losses, you come back to the DAO to ask for more funds?

4. What if the DAO declines to give you more funds?
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-1 point,6 days ago
"3. If Dash price rises, additional funding above the USD 50k + 10% buffer level will be sent to Dash Incubator as additional funding for their development, if the Dash price falls below the USD 50k - 10% buffer, a second proposal would be raised to make up the difference under the same terms."

The Incubator gets the excess money when Dash goes up, but then the DAO is expected to top-up the account when Dash goes down? Why wouldn't you set aside the excess funds so you can put them back if Dash goes down rather than create a recurring drain on treasury funds?
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0 points,4 days ago
Hi Geert,

Thanks a lot for your comment and please see answers below

1. There is no legally binding agreement in place or needed.

2. Yield farming rewards are only user incentives for providing liquidity to the trading pool, we as proposal owner don't generate any income through that.

3. & 4. REN requires 50k as subsidy / user incentives. As soon as Dash NEXT receives Dash funds from this proposal we will exchange directly to USDT as described in the proposal to avoid fluctuations. So there won't be any additional funds needed if requested funds are not dropping below 50k USDT before payment date of this proposal, which is highly unlikely looking at the current Dash price
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9 points,9 days ago
Hi there - Just to clarify some points here that I don't think we communicated easily enough:

1. Who are Dash-DFi / who's this proposal from:

This a joint proposal between Dash NEXT and Dash Incubator.

The above description text of this proposal was created/agreed by both parties as part of an Incubator bounty:

bounty: https://trello.com/c/SNvAnAvk/115-defi-ren-dash-integration#comment-6028e42cd15d2d5738b31a20
document: https://docs.google.com/document/d/1Q9FmQnyWHb6eIHMWdR9q6N72ar66iXpHNFVhjKnskxI/edit?usp=sharing

The payout address (XiC3jR3SLsZeUB33UmettpgSebygr8HXU2) is a wallet under the control of Dash NEXT, but the proposal is sponsored by Dash Incubator via the above bounty.

Dash NEXT own the 'Dash Defi' account used to claim the proposal on Dash Central and on Dash Nexus and is a term used to represent the partnership in that context.

2. How does the partnership on this proposal between Dash NEXT and Dash Incubator work:

Dash NEXT are responsible for custody and distribution of the funds the proposal will pay if passed (both for development via the Incubator and fiat for the liquidity pool incentives) under the terms in the above proposal text approved by Dash Incubator and agreed by Dash NEXT.

Dash Incubator will continue to manage the technical implementation/management of the project.

3. What confidence can the network have that these funds will achieve the stated goals.

While there are several moving parts to this project, we have the experience of Incubator admins/devs, Dash NEXT and an experienced Ethereum developer already working on prior projects together at the Incubator focused on ETH integration/DeFi and this project is a culmination of that work:

https://trello.com/c/rSjuWCp3/103-wrapped-dash-on-ethereum\
https://trello.com/c/Trep6FQi/106-dash-ethereum-oracle-bridge

At the same time steps are detailed in the above text to mitigate risks such as fiat rate volatility or any cancellations on the work by returning funds to the Incubator to use for normal dev funding activities.

4. Why not use DCG or the DIF for custody:

My understanding is that both DCG and the DIF declined to handle the fiat custody component of this project. Based on our experience working with Dash NEXT on the ETH/DeFi related projects leading up to this at the Incubator, and on their past work using proposal funds, they offered to handle this and we agreed.

5. Why is this being submitted late in the cycle:

The proposal was blocked on DashNexus.com for the past week (the 5 Dash was in the Nexus wallet but the collat tx wasn't issued and on their system the proposal was 'stuck'). After chatting with Jeff from Nexus this morning, we got confirmation Nexus wouldn't raise the prop and refund the prop fee to the Incubator wallet (XbFb9b1qaoLykngDbUwBVBFwSHuwQRhSqc), which meant we could raise it ourselves which I did manually from the Incubator wallet, setting Dash NEXT's wallet in the proposal's payout address.

Thanks
Andy Freer
Dash Incubator
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1 point,7 days ago
You have my support
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-1 point,8 days ago
Andy, if the funds are WAY high, which it looks like it's going to be by the time you receive them, would you guys be willing to create another legally binding DAO in the way that DCG has? I think you are going to have plenty of funds to hire DCG's lawyers and have them make something for you. Thanks, that would REALLY benefit the network. And it will make it much easier for us to vote on future proposals. Thanks.
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4 points,8 days ago
Hey Tante

I can only speak for Incubator but no, we're a pure-Dash based fund, we don't handle fiat, contracts etc... everything is transparent and done in public, funded via the Dash protocol and through micro incentives, and all the output is open-source MNOs choose to fund that. I personally don't believe in 'Official DAOs' or that we should be constructing centralized institutions in Dash that make the claim to be 'legally binding' to a globally decentralized monetary network.

What we are working towards is eventually fund the Incubator itself as a dApp from the governance system. Then it could be fully decentralized, not pseudo-decentralized or 'official' etc when there's nothing in the protocol to support those claims.

In terms of the fiat component, that's where maybe contracts could help, which would be Dash Next... but you can see above the 'terms' that were agreed and this was done in a few days... if the network wants to start involving lot more red tape / conditions on this in terms of Dash NEXT side then that's there prerogative, should downvote this proposal to signal the above structure isn't sufficient.

Thanks,
Andy
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1 point,8 days ago
Easy yes.

Nice write-up from the Ren CTO:
https://medium.com/renproject/how-renvm-actually-works-c2f76a2630c4
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2 points,9 days ago
I have a high level of trust in the people involved, and this is much-needed and appreciated infrastructure. Voting yes.
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0 points,8 days ago
At a certain point, though, we need to make contracts. The ask is already over 100,000 and I think we should have a legally binding contractual agreement at this level. I'm going to vote yes here, mostly because of the great work, and the long standing community participation and work these two groups have given to the network, but I suggest that the excess fund they receive go toward organizing themselves similar to the way the DCG has and become an official Dash DAO. DCG will undoubtedly help them.
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1 point,8 days ago
My only complaint is that this didn't happen earlier. Definitely yes - I expect that access to DeFi without even needing a trusted custodian will be a huge boon
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0 points,8 days ago
OK, I see you have put a lot of work into this, but in the future, is it possible for us to pay for your work and provide funding such as this through the DIF? It's not that I want to keep you from profiting off the rising costs of Dash, but it is a precedent. and since we have the DIF, and they are beholden to the network, it seems to me that until the network has more such institutions under it, we should use them. It's possible that in the next month, you will have gotten the equivalent of half a million dollars from the network. What is Dash Next's plan for the excess funds?

Another idea is to become an official DAO as DCG did, with a fiduciary duty to the network. Then I would feel a lot more comfortable not using the DIF to fund your DAO. I mean, I sound like a pain in the butt, however you're entering big money agreements, we can't treat you like Dash Africa, right? It's starting to cross a line :) Thanks :)
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1 point,8 days ago
from Andy Freer :

'My understanding is that both DCG and the DIF declined to handle the fiat custody component of this project.'

So i think using the DIF as you suggest will not be possible.
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1 point,8 days ago
Just to clarify my statement - apparently the DIF declined (via Ryan)... DCG *was* an option but it would have 'involved a more complicated process to align everything. We wanted to get it up asap as there was room to fund this within this cycle' - from Felix from Dash NEXT (i'm not involved in any discussions personally outside of Incubator on this).

So it's obvious that for the fiat component, passing this proposal places trust on the USD 50k being converted and sent to Ren as per the terms purely in Dash NEXT. And that they would send any Dash over the fiat amounts to the Incubator for integration work, and send any Dash beyond that to the Incubator to be used as additional funding (which is always bound by the Rules we raise our own proposals from here: https://rules.dashincubator.app/).

From what i'm being told therefore handling the fiat funds via DCG / DIF would basically create delays, but mean that theoretically there was more trust / recourse in those funds actually being converted / distributed as per the above terms.

In terms of handling of the Dash funds that are sent to Incubator, entering into any contractual arrangement with another DFO isn't something we would do, as we're a standalone fund operating purely from our own ruleset that the Network funds directly.
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-2 points,8 days ago
IDK. This proposal has a lot of problems...

- The ask is based upon what's left in the budget. Bad. We're trying to get away from that.
- It depends upon Ethereum, which IMHO is currently unusable.
- It's based upon the idea that DeFi hype gonna pump our bags. (That's not us.)
- It's rushed and was cobbled together too quickly. If it really is a good idea let's take our time and use the DIF.
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-3 points,8 days ago
https://bitinfocharts.com/comparison/ethereum-transactionfees.html#3m

Average transaction fee, USD | 0.011 ETH ($20.69 USD)
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1 point,9 days ago
Dash on DeFi DEX Proposal.

Please read: https://blog.dashincubator.app/2021/02/14/dash-on-defi-dex-proposal.html
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1 point,9 days ago
It would be nice if Andy Freer could confirm that the mentioned bounty for integrating a wrapped Dash asset on Ethereum through Ren, has been rewarded to Dash-Defi (the owner of this budget proposal) and i would still like to hear some specifics about who the Dash-Defi group exactly is.
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1 point,9 days ago
I agree making the proposal from 'Dash-Defi' is going to be confusing, at the Incubator we approved this proposal text but didn't expect the owner to be that name.

The detail inside the proposal should clarify though... this is a proposal by Dash NEXT, who will have custody of the funds. It's the culmination of a couple of projects inside Dash Incubator where we worked with Dash NEXT.... at this point, we're ready to implement, but Incubator can't handle fiat funds (we are a pure-Dash fund). So we funded this proposal itself as a bounty, as per the terms above.

So this is a partnership between Dash Incubator and Dash Next - Dash Next have custody / management of the funds but the terms were agreed by an Incubator project and we will manage the integration on a technical level. I guess the 'Dash-Defi' name was set to represent that.
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1 point,9 days ago
Thank you. I understand this proposal was suppose to go live a week ago, but hanged at Dash Nexus.

'Please note that the original proposal (Prod task #1) was created on DashNexus.com by Dash NEXT, and was hanging for the past week due to an issue on Dash Nexus's side. I've resolved the issue with Jeff from DashNexus, he's going to refund the proposal to the Incubator address and i've re-raised the proposal from the Incubator wallet today. thanks'

Source : https://trello.com/c/SNvAnAvk/115-defi-ren-dash-integration
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1 point,9 days ago
Yep, well spotted :) We tried hard to unblock the proposal for the last week, just got in touch with Jeff this morning. The consensus internally was people didn't want to wait another 40 days and with the fiat component so I submitted it today, apologies for the last minute (hopefully it won't negatively impact the voting too much)
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2 points,9 days ago
I will await further replies from other masternode operators before voting, but i do feel positive about this.
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1 point,9 days ago
'We propose to create a wrapped DASH asset on Ethereum using the most decentralized approach available - integration with the Ren blockchain and protocol.'

Who is that 'we' exactly ?
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1 point,9 days ago
This proposal was created via a Dash Incubator bounty produced by Dash NEXT, the payout address on the proposal is a wallet under Dash NEXT's control.

https://blog.dashincubator.app/2021/02/14/dash-on-defi-dex-proposal.html
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-1 point,9 days ago
Also, why are you not using the DIF for this? Who will take custody of those 50000 USD in Dash, and how do we know you won't run off with it? The DIF is equipped to take custody of fund, they could pay your fee to run the thing on behalf of the network. I'm not comfortable with this setup.
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2 points,9 days ago
'Dash NEXT is handling custody of the funds provided by the DAO until REN requires us to provide funds for the liquidity farming . Dash NEXT will exchange Dash worth 50k USDT on the same day that funds are transferred to the Dash payout wallet. The rest will immediately be transferred to the Dash Incubator wallet:XbFb9b1qaoLykngDbUwBVBFwSHuwQRhSqc'

So Dash NEXT is taking custody of those 50000 USD.
And we do know Dash NEXT from previous budget proposals.
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-1 point,9 days ago
I am not familiar with any of this, and you've given me 8 days to research. I can't vote in good conscience.
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1 point,9 days ago
The proposal was submitted by Dash NEXT a week ago via the Dash Nexus site... basically it got stuck in their system and this was only sorted out today after support from Nexus.
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1 point,9 days ago
Make that 5 Days
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