Title: [RFC] Warden Finance - Risk & Tooling Engagement
Author(s): Warden Finance
Related Discussions: [N/A]
Submission Date: 2023-02-03
This proposal aims to formalize how Warden will continue supporting Euler in building and maintaining risk and analytics tools. The proposal aim to also formalize how we will contribute to the DAO by reviewing risk parameters on an ongoing basis to make sure they are well calibrated.
Note that we have had discussions with Euler core team members regarding this proposal.
Who is Warden Finance?
Warden helps DeFi protocols identify and manage risks. With the help of our open analytics platform, we propose parameter recommendations based on our in-house research, participate in governance, and build custom risk tools.
Warden has been contributing to Euler since Q1 2022 by building protocol’s main Dune dashboard, implementing the protocol’s subgraph and contributing to governance through proposals and discussions on the forum.
Since then, we have also built a dedicated set of risk management tools for Euler through Warden Finance. The platform encompasses a set of tools for exploring DeFi accounts, running simulations, backtesting strategies and stress-testing protocols. Warden empowers everyone in the Euler community to make data-driven risk decisions.
How we have contributed to Euler so far
- Euler Risk & Analytics Tooling (Jan '23)
- eIP 47 - Promote rETH to collateral tier (Dec '22)
- eIP 27 - Update the USDT IRM (Nov '22)
- eIP 25 - Decrease UNI and LINK Collateral Factors (Nov ‘22)
- Euler dApp Improvements (Nov ‘22)
- Euler Subgraph (April '22)
- Euler Dune Dashboard (Jan '22)
See Warden Finance’s full history on Euler forum
We have also been voting on most of the DAO’s snapshot votes.
Other DeFi Contributions
- AAVE Risk & Analytics Tooling (Jan '23)
- Dune Dashboards
- Uniswap Data Tooling (Oct '22)
- Notional Analytics Dashboard (Dec ‘21)
- Transparency. In the best interest of the community, our platform will always be accessible and open for feedback. We have created tools that are accessible to the public in order to make our proposals as transparent and cohesive as possible.
- Data-driven. Every recommendation we make is based on cold hard data that is accessible and verifiable by anyone. Through the Warden Finance platform, we carry a holistic picture of the protocol and can accurately measure the impact of any change in the system.
- Quality. Risk management is mission critical for protocols, and we believe the tools and recommendations should live up to that standard. We build products that are made to be used and meant to be trusted.
This proposal lays the foundation for a 1-year engagement between the Euler DAO and Warden. Through this engagement, Warden Finance would continue contributing to the Euler ecosystem in the following areas:
- Tooling and infrastructure - Maintain current infrastructure (Dune dashboard, Euler subgraph, risk tools on Warden) and add new features for Euler on the Warden platform. More details in the specifications below.
- Risk management - In collaboration with the core team, actively contribute to protocol’s risk management through governance recommendations and reviews. We propose to publish monthly risk reviews where we validate that the protocol’s governance parameters are well calibrated (CF, BF, IRMs, borrow and supply caps).
- Contribute to making sure Euler governance parameters are well calibrated
- Parameters need to be assessed on a regular basis to account for ever changing market conditions.
- We will make sure parameters are adequate based on market conditions and remain competitive with other protocols.
- Make sure infrastructure is well maintained and can be used by external partners
- Warden has helped and is willing to keep being the primary contributor for the dune dashboard and subgraph work.
- Help with decentralization of the protocol
- Engage Warden as a key contributor for the longer term to help with the aforementioned needs.
Specification & Implementation
Tooling and infrastructure for Euler
Warden platform additions
- LSD monitoring
- Governance parameters monitoring
- New asset onboarding
- Market parameter and interest rate model benchmarking
Infrastructure maintenance and updates
- Maintenance and rework of Euler Dune dashboard
- Subgraph updates (Add governance parameters, various fix related to positions)
- Develop a data extraction tool for Euler subgraph (similar to this) to simplify querying on-chain data for Euler community members.
Monthly risk assessment reports & recommendations
We will work with the Euler core risk team to review governance parameters for all active markets and propose recommendations based on our analyses. More specifically we will review the following parameters:
- Collateral / borrow factors
- Borrow / supply caps
- Interest Rate Models (base rate, kink rate, max rate, kink utilization, reserve fees)
- Treasury (harvesting decisions & adjacent recommendations)
Budget and timeline
Budget: $50K per quarter.
Period: Feb 2023 to Feb 2024 (1 year)
We are a team of three (Hugo Boisselle, David Dallaire & Philippe Labrecque) with deep experience in crypto, tech, and finance. The proposed grant will cover infrastructure cost ($3K-$5K per month to run our simulation platform) as well as contributors time and expertise.
We will post quarterly updates on what we have delivered to the DAO and post monthly risk assessments on the Forum.
We propose a 3 month review period where the DAO can terminate the engagement if it is not satisfied by our performance. Given our track record and past contributions we think it is unlikely that such action should be taken.