EGP#: 34
Title: Service Proposal for Yield Sources Onboarding & Deployment to Other Chains and L2s
Author: DELV
Type: Protocol Proposal
Status: Proposed
Date Proposed: 2024-07-25

References

• EGP30: Hyperdrive Ethereum Mainnet Launch & Security Monitoring and Incident Management Services
• Hyperdrive Mainnet Analytics Dashboard
• EGP29: Hyperdrive Public Testnet Implementation for Element DAO
• Hyperdrive Testnet
• Hyperdrive Whitepaper
• Hyperdrive Documentation Portal
• Hyperdrive Security Reports

Proposal Glossary:

• Factories: Hyperdrive factories are used by governance systems to register the deployer coordinators for different Hyperdrive implementations, maintain a set of sane guards on the configurations used to deploy new pools, maintain a set of admin configurations (like the governance address, fee collector, and governance fees used by deployed pools), and collect the addresses of all of the pools that have been deployed.
• Deployer Coordinators: Hyperdrive deployer coordinators abstract away the details of deploying specific implementations from a factory so that users can deploy pools with any of the factory’s registered implementations using the same functions in the Hyperdrive factories.
• Yield Sources: Any interestbearing vault in which funds can be deposited to earn an interest rate. Hyperdrive markets are selectively built on trusted non-custodial DeFi yield sources.
• EGP34 Services: The Yield Deployment Services and the Alt. Chain Deployment Services (each as defined in the Sentence Summary below) performed by DELV as a service provider to Element DAO.

Sentence Summary

EGP-34 proposes that the Element DAO engages DELV as a service provider to (a) research, identify, select, and ship additional deployer coordinators to deploy further yield sources to Element DAO’s Ethereum Mainnet Hyperdrive deployment (the “Yield Deployment Services”) and (b) research, identify, select, and deploy other Hyperdrive instances for Element DAO on alternative chains, starting with Gnosis chain and then other chains and L2s (the “Alt. Chain Deployment Services”).

Paragraph Summary

This proposal is for a 90-day project term beginning the day the proposal has been accepted by the Element DAO (the “Service Term”), during which time DELV will perform the EGP-34 Services, as described further below, on a non-exclusive basis.

The EGP-34 Services are priced on a per-deployer coordinator basis (which includes factory deployments).

Nothing in this proposal limits the Element DAO’s ability to engage other service providers to perform similar services on behalf of the Element DAO or DELV’s ability to provide similar services to third parties.

Motivation

Now that Element DAO and its governance members have voted to launch the Element DAO instance of Hyperdrive on Ethereum Mainnet, which officially launched on July 3rd, this proposal is being put forward to engage with DELV to perform the EGP-34 Services to add further yield sources to the Element DAO’s Ethereum Mainnet instance and deploy other Hyperdrive instances for the Element DAO to L2s and other chains.

Scope of Work

1. Yield Source Onboarding & Timeline (EVM Compatible)

In order to onboard additional EVM-compatible yield sources, DELV, as a prospective service provider to the Element DAO is proposing to remain as one of the deployerCoordinatorManager’s for the duration of the Service Term.

This is in line with DELV’s currently active security monitoring and incident management service provision to the Element DAO (EGP-30’s Milestone 2) in which DELV will remain as one of the DefaultPausers for the duration of 90 days beginning July 3rd, 2024.

As for the yield source onboarding scope, all of the below deployer coordinators (and respective yield sources) will be deployed at a rate of approximately one per week starting the day this proposal is accepted by the Element DAO. DELV will announce on Discord and Twitter completed deployments under these EGP-34 Services to inform the Element DAO and its community that the relevant yield source or chain is live and available via DELV’s Hyperdrive UI.

This includes Ethereum Mainnet Deployer Coordinators (DCs) such as, but not limited to:

• Renzo’s ezETH

• Rocket Pool’s rETH

• Ethena’s sUSDe

• ether.fi’s eETH

• Morpho Blue - this enables anyone to deploy yield sources and pools such as:

  • Ethena USDe
  • Ethena sUSDe
  • wSTETH

• AAVE - this enables anyone to deploy yield sources and pools such as:

  • Tether
  • USDC

• Note 1: Deploying the DC for Aave and Morpho allows pools to be launched for any asset supported by those lending protocols.

• Note 2: As we discover more yield source opportunities, this list will grow.

• Note 3: DELV reserves the right to elect not to deploy a particular yield source.

2. Chain Deployments & Respective Yield Source Onboarding Timeline

To start, for the Element DAO to own and maintain this Hyperdrive instance, it will require a multisig wallet controlled by the Element DAO or the Governance Steering Council (GSC). Over time, the Element DAO may wish to consider other methods of maintaining these Hyperdrive instances. For instance, it may consider establishing voting vaults (such as an L2-L1 Synthesis vault) or other arrangements to manage these Hyperdrive instances.

Initial Alt. Chain deployment:

• Gnosis Chain:
  • x sDAI
  • WstETH

Further alternative chains and L2s that DELV expects to explore and possibly deploy to over the Service Term (not in any particular order):

• Arbitrum
• Base / Optimism
• Polygon
• Mantle
• Scroll
• Others

These are the initially identified L2s and alternative chains DELV will assess for Hyperdrive instance deployment. As we continue to investigate other opportunities for Hyperdrive deployments and yield sources, we are interested to hear from the Element DAO community. However, it will ultimately be DELVs decision to proceed with any identified opportunities or not. The important thing to remember when identifying where to deploy is to look for trusted yield sources on the specific chains under consideration that enable promising Hyperdrive markets and pools. As always, just as DELV may engage with other projects to implement other instances of Hyperdrive, parties other than DELV may engage with the Element DAO community for deployments and yield sources.

Element DAO’s Payment to DELV as a Service Provider

DELV will submit an onchain proposal to the Element DAO for the EGP-34 Services completed by DELV, in accordance with the following.

• Deployer Coordinator Pricing: 100,000 ELFI per deployer coordinator

  • This pricing reflects DELV’s efforts in deploying the relevant yield source or chain / L2 (factory deployments). The Element DAO is not charged for DELV’s research, identification, or selection. This means DELV gets paid only for completed deployments under the EGP34 Services.

• Payment Schedule:

  • At the end of the Service Term, DELV will submit a final onchain payment proposal and will continue services for the remainder of the Service Term if approved and executed.

Next Steps (Voting Outcome Summary)

1. EGP-34 is Posted on Element DAO Forum (July 25).

• a. DELV welcomes all questions and comments over the next week. Please be advised, DELV Team Members will not provide comments beyond formatting and technical commentary.

• b. Once the feedback has been addressed, this will move to be officially Proposed.

2. 1-Week Review Period

• Once EGP34 is proposed, there will be a 1-week review period before it moves to the next stage, Offchain Poll (Snapshot).

3. EGP-34 Moves to Snapshot (offchain poll)

• Because DELV will remain one of the DeployerCoordinatorManagers as proposed in the Scope of Work section of this proposal, the governance process for this proposal doesn’t require an Onchain vote or any execution from the Timelock. As such, the final vote will be this Offchain poll. Note that the payment proposal will require an Onchain vote but that will be submitted in accordance with the Payment Schedule section of this proposal.

3.1 On Snapshot, the governance community will vote for:

• a. Yes: You agree that EGP34 should be accepted.

• b. No: You disagree that EGP34 should be accepted.

• c. Abstain: You formally decline to vote either YES or NO.

3.2 Snapshot Voting Period Ends (Offchain Poll).

• If this proposal passes the Offchain Poll, EGP34 will be formally approved and accepted by Element DAO governance (August 6).

Important note: DELV will provide logistical and technical support for putting the proposals offchain (poll) and onchain (vote), but neither DELV nor DELV Team Members will participate in the poll or vote. Furthermore, DELV engineers will provide technical comments only, when clarity is needed; they will not provide any statements on the wisdom or appropriateness of the proposal.