Idle

The following is an extract of the proposals posted on the Idle governance forum. The goal is to update the DAI Best Yield’s underlying markets by removing Euler YTs and adding the Clearpool (Portofino) Yield Tranches.

1. Remove Euler as a yield source of Senior and Junior Best Yield strategies on DAI.

On March 13th, Euler suffered an exploit by a hacker stealing around $200m of funds deposited in the protocol. Euler was one of the underlying markets below Best Yield strategies and Yield Tranches. Part of the funds deposited on Euler was then locked with users unable to withdraw their funds.

With the recent positive events leading to a full recovery of the stolen funds, we can start discussing the next steps of the strategies affected.

Based on internal risk assessment, we suggest to remove Euler from the basket of yield sources of the strategy at least until a new audit check is run. This market could be added again to Best Yield after a re-assessment of the newly audited Euler protocol and via an Idle DAO vote.

The current yield source of the Best Yield strategies would then be:

Strategy	Token	Underlying markets
Senior BY	DAI	Aave, Compound, Euler
Junior BY	DAI	Euler, Morpho

2. Clearpool YTs as a new yield source for DAI BY - Portofino

This proposal aims to add a new Clearpool Yield Tranche to the Best Yield strategies based on DAI:

• Clearpool DAI (Portofino) YTs, with specs available on GitHub here

Portofino Technologies is a high frequency trading market maker that uses borrowed funds as trading capital, providing superior returns thanks to its advanced machine learning & stochastic control techniques.

Clearpool (Portofino) pool is live since early March. The Portofino pool has a size of ~$1m and a maximum borrowing capacity of up to $24m. Credora rates the borrower with an A.

Protocol	Borrower	Capacity	Pool size	Credora’s rating
Clearpool	Portofino	$24,300,000	962,740	A

At the time of writing, the Portofino pool provides 16.55% APR with an 81% utilization rate (source).

Following the new version of the risk rating framework, the Clearpool (Portofino) Yield Tranches can be considered as a valid market to become a new yield source of the Best Yield strategies.

In order to trigger any BY deployment, the Yield Tranches will need to have at least a 30% coverage on Senior funds coming from the Junior counterparty.