eGP2: Grant Request for IntoTheBlock to Develop Risk Management Tools for Euler
Authors: IntoTheBlock Research
Submission Date: September 7, 2022
IntoTheBlock (ITB) is requesting a grant to build a set of risk management solutions for Euler and its community:
- A dashboard monitoring general and pool-specific risk indicators
- API access and CSV downloads for all these indicators
- Documentation covering Euler’s risk dynamics
- A comprehensive report diving deep into Euler’s risk metrics and status
The dashboard would be hosted on a new risk management section within IntoTheBlock’s platform. Each indicator’s data would be openly available for Euler Labs and Euler’s users to track economic risk conditions, and will be updated on a daily basis. On a quarterly basis IntoTheBlock’s team would add support for more assets, update indicators and status reports.
IntoTheBlock has been deeply involved in DeFi over the past two years. This began with the launch of DeFi Insights analytics and grew substantially through its institutional quantitative strategies (ITB Quant) services. ITB’s DeFi Quant Platform serves as the gateway used by over 20 of the largest crypto institutions to access DeFi yields via sophisticated quantitative strategies with corresponding risk management models. Euler’s strategies have been one of the newest additions to the ITB DeFi Quant platform.
To help streamline institutional adoption of DeFi, IntoTheBlock decided to enable access to its risk indicators and models via APIs and analytics dashboards. The objective of this proposal is to enable those risk models for Euler’s institutional and retail investors.
Risk monitoring and management is paramount for any financial service. The recent events in the DeFi market have proven that risk management is essential to catalyze the growth of the space. At ITB we believe that risk management in DeFi should be done out in the open, following crypto’s ethos, and not be a luxury expense.
Following ITB’s experience safeguarding hundreds of millions into DeFi through advanced risk management models, we believe that expanding these tools and offering them to Euler would help make DeFi safer over the mid- to long-term. Enabling real time economic risk monitoring for Euler should be an important element to provide confidence to institutional and retail investors.
Specification & Implementation
IntoTheBlock is requesting $85,000 to enable near real-time economic risk monitoring and analytics for the Euler protocol. Specifically, the grant will cover the following deliverables:
- Economic Risk API: REST API enabling access to dozens of economic risk indicators in the Euler protocol.
- Economic Risk Dashboard: Web interface that includes visualizations of the most important risk indicators.
- Documentation: Complete documentation of all risk indicators included in the release.
- Quarterly Report: Brief report outlining risk vectors affecting Euler, its current status and evolution.
These deliverables will be split into three main milestones, requesting $20k to be paid upon completion of each plus $25k upfront. Additionally, we propose a $5k management fee to update and iterate upon these metrics based on community feedback.
Euler ITB Grant Milestones & Payments:
- Upfront payment ($25k)
- Indicators 1-10 (dashboard + API) ($20k)
- Indicators 11-20 (dashboard + API) ($20k)
- Documentation covering Euler’s risk dynamics + comprehensive report diving into Euler’s risk metrics and current status ($20k)
This release will include the risk indicators outlined in this document for the seven assets supported as collateral on the Euler protocol at this time. Some indicators will be available from a general viewpoint of the protocol, others apply specifically to each asset individually and some will be displayed from both categories as specified in the spreadsheet. The following Figma mock-up made by ITB’s design team demonstrates how the proposed layout would look like. (Keep in mind that this does not yet include live data from protocol and is just for reference).
These indicators are subject to modification based on feedback from the community and Euler’s team. IntoTheBlock is committed to maintain and expand the capabilities of the Euler risk monitoring solution that address changes to the protocol or market conditions.
IntoTheBlock’s proposal looks to enable real time economic risk monitoring for the Euler protocol. The risk indicators included in this proposal are based on IntoTheBlock’s experience managing and monitoring risk for Euler and similar protocols. The initial release is an attempt to democratize access to sophisticated risk models for all investors participating in the Euler protocol.