eIP 54 Deploy Euler to Polygon

[eIP] Euler Improvement Proposals Voted Proposals
1

Title: [RFC] Deploy Euler on Polygon
Author(s): Jack Melnick
Submission Date: 2/7/2022

Submitted in the format laid out in [RFC] Formalizing Multichain Deployment

Point of Contact: Jack Melnick, DeFi Business Development Lead @ Polygon Labs

Two Sentence Summary: Over the past ~year, Euler has established itself as a premier permissionless DeFi lending market through implementation of its unique Tiered Lending system. To help in its growth trajectory, we would like to invite the team to launch Euler on Polygon zkEVM, following its deployment at the end of Q1, which is in line with Euler’s goal of an April multi-chain expansion

Proposal Overview: Polygon is the leading blockchain development platform, including solutions like Polygon PoS and Polygon zkEVM (first public EVM compatible L2 ZK rollup live on testnet). Polygon’s scaling solutions have seen widespread adoption with tens of thousands of decentralized applications hosted, 2.2B+ total transactions processed, 180M+ unique user addresses, and $2B+ in assets secured.

Through a combination of 400k+ active weekly wallets on the PoS chain and collaboration with mainstream brands like Robinhood, Polygon’s aim is to deploy dApps like Euler into broader and better-rounded markets. Reinforcing this goal, Polygon’s DeFi ecosystem has experienced consistent growth, irrespective of the market conditions, and continues to be the preferred destination for DeFi. From Ethereum blue chip protocols, like Aave, Uniswap v3, Curve, and LIDO to Prominent Polygon-native projects, such as QuickSwap, QiDao,and Gains Network, the success stories speak for themselves.

Additionally, Polygon’s DeFi ecosystem has already become self-sustainable. We effectively stopped the majority of liquidity mining incentives more than a year ago, yet continue seeing constant capital and user inflows, showing a clear path toward sustainable growth for deploying dApps.

Motivation, Rationale, and Key Goals:

  • Increase distribution and dApp discovery pathway: Users enable volume, and volume generates revenue for the protocol. Web2 giants like Robinhood have chosen Polygon to build their non-custodial wallets to enable dApp discovery, and enable dApps to capture more users (1.5M+ signups) through Polygon.

  • Marketing Support: Polygon brings vibrant marketing support to help you showcase the product and capture a large audience base. Through this support, we can help GMX establish a global brand presence.

  • zkEVM Launch: Polygon zkEVM will be launching by the end of Q1, allowing developers to easily port over EVM codebases onto a true Layer Two zero-knowledge scaling solution, the ‘holy grail of scalability’. On the testnet, over 84,000 wallet addresses have already been created, with ~300,000 transactions. You can find more info in the docs and zkEVM testnet explorer.

  • stMatic - Euler can include the staked version of Matic. The underlying PoS yield will help provide sustainable lending rates, uncorrelated with bear market conditions. Liquid staking on Polygon has grown from 5m MATIC staked to 90m, and continues to grow as more use cases arise for MATIC liquid staked derivatives (LSDs).

  • Resilient and sticky liquidity - Polygon natively has resilient and sticky liquidity. Pools will have deep liquidity, with no need to worry about porting liquidity from mainnet. This Report from Messari gives an in-depth overview of the state of Polygon’s liquidity.

Non-Technical Evaluation

  1. TVL on the Chain: $1.75b
  2. Amount of protocols on the chain: 1729
  3. (#) of unique addresses on the chain: 3,395,847, in the last month
  4. (#)of new users joining in the past 90 days: 6.47mn
  5. (#) of successful transactions per day: 2,865,756/day, 7 day moving average
  6. Average gas fee in the past 30 days: Median gas fee over the last month has ranged between 60-163 gwei, having steadily increased over that period as PoS activity has risen. That said, even at a gas fee of 165 gwei, with a priority fee of 30 gwei, transaction fees are ~0.003 MATIC (~ 0.3 cents).

Bridging Process

Upon deployment to zkEVM, the chain will switch to an LX-LY bridge.

More complete information on zkEVM, and its current state on testnet can be found in the developer documentation here.

Considerations

Polygon’s DeFi Team has experience supporting and onboarding new protocols into the ecosystem. As part of that process, the Euler team would have any necessary developer and marketing support to ensure a smooth and successful move.

4 Likes
2

I wonder if the euler labs team can even support these external deployment requests? these multi chain deploys are not as easy as you would think and can be a significant burden for smaller teams.

1 Like
3

I think there’s a lot of risk analysis that should go into any new deployment, especially on oracles, liquidity for liquidations, and that kind of thing. It’s certainly not a case of just deploy code, and change the chain ID in the UI. Each deployment should be done carefully and slowly, as the original Ethereum deployment was done. And it would be good to do additional in a targeted way with longevity in mind. Aave was very fast to go multichain and needed to scale things back after issues, so it would be good to learn from that and prioritise accordingly.

4

I completely agree that Euler must be deployed on Polygon, but it must be done in the best possible conditions no matter if it takes several months. I am also for the Euler team to deploy all the new features on Ethereum before moving on to other chains.

5

Personally, I have nothing against Polygon. But the DAO decided to start it’s other chains/L2 expansion with BSC. In this respect I believe that Euler should be first deployed on BSC and get stabilised with side issues, like governance are fine-tuned before proceeding to any substantial discussion about other chains.

6

@yonijmel can you clarify please, this is an RFC to launch on Polygon or specifically on PolygonzkEVM?

Regarding the opportunity set on Polygon, Aave has an instance on Polygon which we can use as a point of reference. A couple stats stood out:

  • Polygon instance generated north of 11% of revenues for Aave in 2022.
  • TVL on Aave accounted for 31% of the total TVL on Polygon at year-end. For context, it closer to 12% on Ethereum mainnet. So there is appetite for borrowing/lending.

In terms of DeFi activity on-chain, comparing TVL changes and ratios between Ethereum and Polygon shows very similar stickiness in 2022 (Polygon quarterly report coming soon for more there).

Hope helpful,
JTVL

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1 Like
7

Thanks JTVL for the comment -

This is an RFC to specifically launch Euler on zkEVM. Given conversations with the Euler team, we’re anticipating timelines for deployment onto alternate chains will be measured in months (which makes total sense, given necessary precautions). Polygon is aiming to launch zkEVM replacing PoS mainnet by the end of Q1. Given that, we would rather work together toward a single deployment onto zkeVM, rather than bog team down with unnecessary information. Testnet is already live, and we would (of course) provide any necessary developer resources to help make the transition as smooth as possible & ensure adequate prior testing. Hopefully this also helps answer @connormartin 's question about support for external deployments.

So, in summary, yes to zkEVM- but the opportunity is the same as launching on ‘Polygon’ as it stands today, and will offer all the same potential benefits to TVL, revenue, and usage.

2 Likes
8

Adding a temperature check for the proposal. Would clarify that this is not a proposal to deploy on Polygon before other active/passed votes, merely to begin Polygon <> Euler plans to deploy on zkEVM down the line.

Should Euler Deploy on Polygon zkEVM?

  • Yes, in favour of the proposal
  • Modify the proposal
  • No, against the proposal

0 voters

9

i support the idea of deploying on polygon zkEVM

1 Like
10

Hi @yonijmel I have two question that i have put to every chain advocate that has proposed for Euler deployment on their respective chain:

  1. How will your chain support Euler (marketing, engineering, liquidity, any other commitments, etc) before, during and after the deployment.

  2. What incentive can the chain provide Euler to help Euler incentivise user acquisition in your chain.

11

Hi @shaishav0x, I saw you ask these in other threads, and tried to answer them in the body of the proposal, but will address them briefly again here too for clarity.

For Point 1- Euler will have marketing, dev, and partnership support from the DeFi team at Polygon to help make the transition to Polygon as painless and successful as possible. We’re already closely connected with a few of them, and believe that we offer best-in-class support here.

For Point 2- It’s been team policy for a while now to avoid liquidity mining, as it can help attract new users, but ultimately doesn’t help attract sticky users that are beneficial for long term success of the project on a new chain. A number of projects, like Lido, have seen extremely successful deployments on Polygon (Dune Link for Ref) as a result of the effort that we’ve put into helping them find organic Product Market Fit on chain through partnerships and ensuring that their impressive product suite is available and noticed!

12

Title: [EIP-54] Deploy Euler on Polygon zkEVM
Author(s): Jack Melnick (@jackmelnick_)
Submission Date: 2/24/2022

Submitted in the format laid out in [RFC] Formalizing Multichain Deployment

Point of Contact: Jack Melnick , DeFi Business Development Lead @ Polygon Labs

Two Sentence Summary: Over the past ~year, Euler has established itself as a premier permissionless DeFi lending market through implementation of its unique Tiered Lending system. To help in its growth trajectory, we would like to invite the team to launch Euler on Polygon zkEVM , (not PoS), following its deployment at the end of Q1, which is in line with Euler’s goal of an April multi-chain expansion & would allow them to meet any outstanding deployment commitments.

Proposal Overview: Polygon is the leading blockchain development platform, including solutions like Polygon PoS and Polygon zkEVM (first public EVM compatible L2 ZK rollup live on testnet). Polygon’s scaling solutions have seen widespread adoption with tens of thousands of decentralized applications hosted, 2.2B+ total transactions processed, 180M+ unique user addresses, and $2B+ in assets secured.

Through a combination of 400k+ active weekly wallets on the PoS chain and collaboration with mainstream brands like Robinhood, Polygon’s aim is to deploy dApps like Euler into broader and better-rounded markets. Reinforcing this goal, Polygon’s DeFi ecosystem has experienced consistent growth, irrespective of the market conditions, and continues to be the preferred destination for DeFi. From Ethereum blue chip protocols, like Aave, Uniswap v3, Curve, and LIDO to Prominent Polygon-native projects, such as QuickSwap, QiDao,and Gains Network, the success stories speak for themselves.

Additionally, Polygon’s DeFi ecosystem has already become self-sustainable. We effectively stopped the majority of liquidity mining incentives more than a year ago, yet continue seeing constant capital and user inflows, showing a clear path toward sustainable growth for deploying dApps.

We would provide as much support is needed over the course of Euler’s deployment process to ensure that all key concerns around risk, oracles, liquidity and more are all satisfied.

Motivation, Rationale, and Key Goals:

  • Increase distribution and dApp discovery pathway: Users enable volume, and volume generates revenue for the protocol. Web2 giants like Robinhood have chosen Polygon to build their non-custodial wallets to enable dApp discovery, and enable dApps to capture more users (1.5M+ signups) through Polygon.
  • Marketing Support: Polygon brings vibrant marketing support to help you showcase the product and capture a large audience base. Through this support, we can help GMX establish a global brand presence.
  • zkEVM Launch: Polygon zkEVM will be launching by the end of Q1, allowing developers to easily port over EVM codebases onto a true Layer Two zero-knowledge scaling solution, the ‘holy grail of scalability’. On the testnet, over 84,000 wallet addresses have already been created, with ~300,000 transactions. You can find more info in the docs and zkEVM testnet explorer.
  • stMatic - Euler can include the staked version of Matic. The underlying PoS yield will help provide sustainable lending rates, uncorrelated with bear market conditions. Liquid staking on Polygon has grown from 5m MATIC staked to 90m, and continues to grow as more use cases arise for MATIC liquid staked derivatives (LSDs).
  • Resilient and sticky liquidity - Polygon natively has resilient and sticky liquidity. Pools will have deep liquidity, with no need to worry about porting liquidity from mainnet. This Report from Messari gives an in-depth overview of the state of Polygon’s liquidity.

Non-Technical Evaluation

  1. TVL on the Chain: $1.75b
  2. Amount of protocols on the chain: 1729
  3. (#) of unique addresses on the chain: 3,395,847, in the last month
  4. (#)of new users joining in the past 90 days: 6.47mn
  5. (#) of successful transactions per day: 2,865,756/day, 7 day moving average
  6. Average gas fee in the past 30 days: Median gas fee over the last month has ranged between 60-163 gwei, having steadily increased over that period as PoS activity has risen. That said, even at a gas fee of 165 gwei, with a priority fee of 30 gwei, transaction fees are ~0.003 MATIC (~ 0.3 cents).

Bridging Process

Upon deployment to zkEVM, the chain will switch to an LX-LY bridge.

More complete information on zkEVM, and its current state on testnet can be found in the developer documentation here.

Considerations & Planned Support for Deployment

Polygon’s DeFi Team has experience supporting and onboarding new protocols into the ecosystem. As part of that process, the Euler team would have any necessary developer and marketing support to ensure a smooth and successful move.

Polygon has avoid liquidity mining, as it can help attract new users, but ultimately doesn’t help attract sticky users that are beneficial for long term success of the project on a new chain. A number of projects, like Lido, have seen extremely successful deployments on Polygon (Dune Link for Ref) as a result of the effort that we’ve put into helping them find organic Product Market Fit on chain through partnerships and ensuring that their impressive product suite is available and noticed. The goal is to accomplish the same for Euler: consistent TVL, user, and product growth across a market that has massive demand for structure lending.

Voting

Yes : Deploy Euler on zkEVM.
No: Make no changes.

13

Hi @yonijmel.

Would be good to consider waiting for sometime before putting this proposal for vote:

  1. EulerLabs team currently have their hands full with the BNB chain deployment.

  2. The dao is still finalising RFC: Formalizing Multichain Deployment Process

  3. It would be good for the dao to have some time to assess the success or otherwise of the BNB chain deployment to better strategise Euler’s multichain deployment vision and direction.

  4. zkEVM is not ready today and hence there is no rush for this proposal to be put on vote.

1 Like
14

Thank you for giving more clarity on this.

On 1 - this is helpful and thank you for committing resources from Polygon team. On the marketing and partnership support, would be good if we can get a more detailed/quantative roadmap as what this support will look like to be better asses and to ensure on delivery of the said support.

On 2 - completely understand the Polygon team’s policy and concern here. I agree on long term subsidy paid in tokens not always bringing the right result. But initial liquidity mining is super helpful for new protocols launching on the chain and I think Polygon team should reconsider token incentives for a limited time to ensure new protocols can jump start liquidity/tvl and. This subsidy can be limited to only for initial set of month (for example 3 months from launch).

This would give teams high confidence to able to launch on Polygon and jumpstart tvl on their protocols. All thing considered, there is also a cost for the protocol when they launch on Polygon (in form of time, resource, incentives in their own tokens, etc) and meeting them halfway would ensure more deployments.

15

https://snapshot.org/#/eulerdao.eth/proposal/0x4761ad8b032b70e1232e3054a776d266293d1483f89d24b35f723fb158c83957

Snapshot is Live

16

Being deployed in ZK rollup is being on the cutting edge. I would consider deploying if there is no already accepted EIP (BNBChain) and considering Multi Chain Framework.