Title: Grant Request for Defishy.xyz to build Euler-specific liquidation health dashboard
Author(s): Charlie Ambrose, Alex Craig, Aaron Xie, Luke Xie
Submission Date: July 25th, 2022
We are requesting a $5,000 grant to build an Euler-specific liquidation health dashboard on Defishy.xyz. Defishy is a new analytics platform that enables stakeholders within borrowing & lending ecosystems to manage liquidation cascade risk. So far, we have integrated an MVP version with Aave and are looking to integrate with Euler next.
The Defishy team is composed of four members of Dartmouth Blockchain. Our club philosophy is to continually provide value to the blockchain ecosystem through shipping useful products and research. The Defishy team consists of four individuals with development, design, and growth experience. We have extensive experience in DeFi, having contributed at Yeti Finance, Tribe DAO, Temple DAO, and more.
Defishy will improve the Euler stakeholder/token holder experience by allowing users to identify wallets close to liquidation on Euler and position themselves accordingly. The recent crash of May 2022 was caused largely by a series of liquidation cascades as large whale wallets were liquidated. As liquidators sold massive amounts of collateral on exchanges, it dropped collateral price, which resulted in more liquidations. We created Defishy to democratize liquidation health data of all wallets, such that users are able to manage liquidation risk more effectively. We have currently integrated with Aave, and after speaking with multiple members of the Euler team and users of Euler borrowing and lending, we think this integration will be beneficial.
There are a number of risk vectors in borrowing and lending protocols, including smart contract risk, price oracle manipulation risk, governance / pool management risk, and market risk (liquidations + bad debt). As protocols like Euler continue to onboard more users, it is increasingly important to equip users with necessary risk-management analytics for healthy activity. Safeguarding users against risk ensures the long-term sustainability of the protocol, as well as an improved user experience (competitive differentiation with other borrowing and lending protocols).
Projects like gov.gauntlet.network and bad-debt.riskdao.org have showcased what is possible with on-chain analytics for DeFi. On a longer term horizon, we hope to expand on previous projects in two ways: historical data and granular daily data. We will store various metrics (some already live at defishy.xyz), including Aggregate Liquidation Health, Total Collateral Value at Risk, Wallets at Risk, and more. Users will be able to monitor the historical trends of these metrics, while also viewing granular breakdowns of these metrics per day. See the following Figma mockups for reference: mockup 1, mockup 2 (we hope to execute this vision on a longer time horizon). We see Defishy as a useful public good for various stakeholders within the Euler ecosystem to manage risk: the DAO governors, users (borrowers and lenders), and researchers.
Specification & Implementation
We are requesting an initial $5k grant to fund the development of integrating an Euler dashboard to Defishy.xyz, with the following deliverables:
- Live metrics presented: Active Wallets, Wallets at Risk, and Aggregate Liquidation Score
- Live breakdowns presented: Active Wallets (includes address, supply amount, borrow amount, and liquidation health)
The deliverables will be live at defishy.xyz.
Next steps / To-do:
- Inspect smart contracts to figure out data pipeline setup
- Run nodes to scrape data from Euler protocol
- Upload data to backend (currently using Firebase)
- Apply Aave liquidation health metric to Euler wallets
- Make calls from frontend to display data
- Create frontend UI
How long will development take?
- We estimate development time to take ~2 weeks from the proposal vote going though. Based on feedback from community members, we plan to continue iterating and shipping out new and useful features.
What will the $5,000 be used for?
- Database storage ($500)
- Server hosting ($50)
- Nodes ($450)
- Contributor compensation ($4,000)
- Yes vote - Yes, fund $5,000 to Dartmouth Blockchain multisig (0x761DaE43C915914A681e15D17fd85603C78DEF5f) for 2 weeks of development work: liquidation health dashboard at defishy.xyz/protocols/euler
- No vote - No, don’t fund $5,000 to Dartmouth Blockchain multisig (0x761DaE43C915914A681e15D17fd85603C78DEF5f) for 2 weeks of development work: liquidation health dashboard at defishy.xyz/protocols/euler