Bringing YFD to Comdex: Community Strategy Factory, Create Custom Strategies on Comdex

Dear Comdex Community,

My name is Clean, a founding contributor of the Y-Foundry DAO project. I develop DeFi strategies including:

Today marks the 426th day of our journey to build a decentralized, trustless, permissionless vault factory called Y-Foundry DAO (YFD). To sum it up, users can propose, fund, and build ideas using the Y-Foundry dApp which connects to a set of open-sourced trustless smartcontracts developed by YFD using Rust and CosmWasm. .

YFD’s architecture creates a community led platform that builds and deploys projects onto Comdex all transparently and on-chain without VC deals, token generation events, and permission from a core team.

Despite being delayed by the Terra crash in May 2022, we have finally completed smart contract development of the protocol (audited) and are live on Terra Testnet (https://dapp-test.yfoundry.io) testing and finalizing the User Interface and Experience.

I am excited to share with you our proposal to bring YFD to Comdex, which will enablecustom strategy vaults and the decentralized funding of community ideas through community led governance proposals. No validators required.

Custom Strategy Vaults

Simply put, a custom strategy vault takes a strategy idea, and automates it.

For example:

“Borrow CMST at a safe value against CMDX, and then use borrowed CMST to execute an arbitrage strategy between Token X and Token Y to beat the interest rate… generating a total of XX% return per cycle. Multiplied by 24 cycles a year (twice a month), results in an estimated XX% APR.”

Custom strategy vaults are made bespoke to work with the apps in each ecosystem, so this means that they can:

  • work with cSwap
  • work with Commodo
  • work with CMST
  • work with cAssets
  • work with new protocols that launch on Comdex!

Here’s how it works:

PROPOSAL stage :-

  • Proposers create proposals for their custom vault/dApp.
  • Users can support existing proposals by voting and funding them.
  • When enough funding and affirmative votes have been secured in the proposal, the proposal can be executed and continues to the BUILD stage.

BUILD stage :-

  • In BUILD MODE, the developer that had been selected for the proposal and whitelisted by the community can start working on the code and delivering based on the milestone commitments defined in the proposal. The funding to be released to the developer is secured in escrow by the proposal contract and visible to anyone who has access to the blockchain.
  • Each payment is available to be released on the predefined proposal milestones. Payments are released by the proposer and funders voting to affirm the release of the funds after reviewing the milestone deliverables.
  • Once all milestones are completed, the code is ready to DEPLOY.

DEPLOY stage:-

  • The completed vault/dApp code is received, audited, and all remaining payment to the devs have been completed. The DAO now holds the code in the community repository.
  • The completed code uploaded to the chain and the code_id of the uploaded contract code is submitted to a DAO-wide governance proposal for instantiation
  • The proposal passes, and the new vault/dApp is deployed onchain making the DAO Governance Contract the owner of the newly instantiated vault
  • NFT shares are minted for the Proposer, Supporters, and DAO treasury.

ACTIVE stage :-

  • Users can now use the new vault/dApp and earn the yield from the custom DeFi Strategy
  • As revenues and rewards are generated by vault fees they are sent to the DAO Governance claim contract and available to be claimed by NFT shareholders on demand.

Prepared Vaults

Currently, we have completed vaults for Terra that would perform auto-compounding yield-optimization which can be adapted to work with Harbor.

These vaults can be further customized based on community preference (should we sell or keep $HARBOR tokens, etc.). Variations of strategies can be implemented based on community desire.

The modularity of YFD vaults allows these decisions to be reached by consensus of its users rather than the will of a few people. YFD enables this on-chain as a governance-changeable parameter (e.g. Reward Sell Rate) for transparency and decentralization.

Once initial vault contracts have been developed for the Harbor and other protocols on Comdex the community can vote to create new vaults that are variations of existing vault strategies which make modifications to the earlier vault’s underlying strategies. Being able to re-use the base vault code that was created through earlier proposals allows YFD to become more and more capital efficient over time by reusing existing code to drive down the cost and time required to develop and deploy new and creative strategies to work with Comdex’s expanding market of assets and protocols.

Funding Community Initiatives

The mechanisms involved in disbursing funds from a vault proposal are managed by the wallets that provided the funds to the proposal proportionate to their contribution. This funder managed distribution mechanism provides a level of protection by ensuring all escrowed funds disbursements are controlled by those wallets that provided the funds and the intended recipient must show progress to the proposal funders before being able to receive payment at each pre-defined proposal milestones.

This same mechanism can be used to disperse automated grants with the ability to be canceled or clawed back to the fund contributors if the recipient is not delivering on promises. The ability to control the flow of funds introduces much needed accountability, and puts the onus on those community members who provide the funds the proposals rather than a highly select council of grant administrators.

Payment recipients also need to be whitelisted via a DAO vote prior to the proposal being submitted, which adds an additional layer of security and oversight to the process without the pressure and urgency of having to vet the development team during the proposal process itself.

This secure funding mechanism is available to everyone and anyone who would like to fund with transparency, accountability, and openness.

How does YFD make revenue?

The revenue model of YFD comes from taking a share in each project launched. 33% of the NFT shares are minted into the DAO treasury out of each successful launch.

The value the DAO brings:

  • The need for inflationary token emissions is replaced by real revenue — Because the DAO makes real revenue from real projects, then it earns by making actual economic improvement in Comdex instead relying on tokenomics games, empty promises, and over-financialization.
  • Receiving revenue tokens aligns the DAO towards helping projects succeed. Imagine having an entire community of data scientists, analysts, technical advisors, and marketing specialists working towards your project’s best interest. Not to mention people who will actually use your product. The DAO gets stronger when the projects it funds get stronger.
  • Also, YFD does NOT take a cut out of the escrowed funds contributed by community members and the proposer into proposals. The YFD DAO core principles consider this to be a misalignment against the intent and design of the protocol; First, the DAO would be essentially taxing its own community and membership. Two, the protocol profiting from simply having a high volume of low quality grants and proposals would provide incentives to disregard security or quality concerns in the name of protocol revenue (i.e. risky, scammy, or fraud proposals).

What makes YFD different from any other yield-optimizer protocol?

In YFD, there is no core team holding privileged admin access. Everything is designed to be built and managed as a community.

The DAO holds the sole power to deploy, or shut down vaults and proposals alike. However, that is not to say that users can simply wreak havoc through on-chain governance. Each governance parameter, and each smart contract is designed with the “can’t be evil” mindset.

Don’t trust, but verify that YFD is designed with safety in mind. We invite you to dig indeep into the code and make suggestions for updates and improvements or better yet, submit a proposal to the DAO community to fund your ideas to improve the Y-Foundry platform. YFD has a bounty ecosystem that can be leveraged along with various auditing services such as the ones from CodeArena (not sponsored) to provide consistent problem identification and security improvement processes.

Comdex Grant Request and Terms

With the above in mind, we would like to collaborate with the Comdex team to deploy YFD contracts onto the Comdex chain. This will allow Comdex users to use the above mechanisms mentioned with a local version of the $YFD token, which ensures that $YFD on Comdex will have its own sovereign, user-led governance independent of any other YFD launch on other chains .

The grant amount requested is 300k CMDX tokens vested in the following milestones:

  • 15% vested on testnet deployment
  • 25% vested on mainnet deployment
  • remaining 60% vested over one year

Disclosure

YFD raised $1.5M capital from seed investors in January 2022 for the purpose of deployment on Terra, however due to the events of the May Crash and non-functionality of Anchor and Mirror Protocols, we have lost the following amounts:

  • $355k spent on development of specialized strategy vaults (Hedge+ & Shielded Shorts) which are no longer functional due to stoppage of Mirror and Anchor. The DAO has control of the code and the strategy logic that has been developed could potentially be repurposed for protocols on Comdex. Some research is required and secondary to the priority of launching the YFD platform itself.
  • $540k lost from depeg of UST

Our remaining runway has been spent on completing the governance and proposal contracts of YFD, and contributors have continued working without payment as of November 2022.

This grant will help provide a minimum runway for our contributors (currently a team of 3) to continue working on supporting YFD’s deployment on Comdex, as well as create strategies, engage the community, and build partnerships in the ecosystem…

YFD is designed to be a self-funding ecosystem with the ability to support itself post launch through revenue generation from its 33% share of launched vaults to create a diversified treasury.

In the meantime, YFD pays for itself by generating utility for the Comdex ecosystem with its accountable funding mechanism, as well as creating vaults with novel strategies that leverage synthetic cAssets, the CMST stable asset, cSwap DEX, Harbor, and the Commodo lending market.

What role do you play in this?

As a community member of Comdex, you are responsible for deciding what objectives deserve to be funded . This is an important role to ensure the safety, reliability, and continued innovation of the platform.

We would invite the Comdex community to extend this responsibility to Y-Foundry DAO when it is launched on Comdex.

There it is, dear Comdex community member. There is much work to be done, and you must have lots of questions. We invite you to ask your questions below and I, or one of the other YFD contributors will answer in as much detail as we can.

Let us look forward to this new age in building Decentralized Economies.

2 Likes

Looks interesting.

I also like that you have split the payment into milestones, where the first payment is only released after something has been created and released on the testnet.

Can you change it from a vesting into a multi-sig? Vestings are done with a time-phased approach and do not require actual releases of code. A multi-sig can check a milestone is actually met before the funds are transferred.

How will $YFD be distributed? Is it not smarter to maybe integrate this with $HARBOR to give it an additional use-case for this?

1 Like

next token OMG… XD and cmdx still no usages

I would forget, the only use is liquidity for the team’s salary

It’s important to recognize that this is not from the core Comdex team and also appreciate that Comdex modules are designed to be used for other projects as well.
Furthermore, they have a grant program in place that allows anyone who believes they can add value to the Comdex ecosystem to apply.

I encourage you to read the tweet below for more information:
https://twitter.com/VilSa_9/status/1632031044206751746

2 Likes

Hey there Cryptoman,

Thanks for taking the time to read our proposal!

I believe we are on the same page re: time-based vesting vs result-based. YFD’s proposal is very much in favor of result-based, meaning testnet milestone payment is contingent on actual deployment on testnet, not a calendar date or a block height.

Perhaps the comdex team can illuminate on the actual mechanism of grant distribution, but it’s my likely guess that it will be as you say, from a multisig.

As for $YFD token distribution, currently in favor of distributing via bounties (https://app.dework.xyz/y-foundry-dao/mvp-testing), which is in line with the YFD ethos of “anyone can contribute and take ownership”, and staying decentralized.

Staying with that theme, any protocol could potentially integrate with YFD — there are no specific barriers to doing so. Mutual collaboration is probably the end goal anyway for ecosystems that decide to deploy YFD.

I hope that helps answer your questions! HMU if you’ve any more.

2 Likes

No further questions for now. Looking forward to seeing you guys on testnet. :slight_smile:

1 Like