Smart Treasury is available here.
The research article released by Placeholder VC in September 2020 proposes, for the first time, an automated buyback mechanism applied to Governance’s capital efficiency.
The process consists of deploying a Balancer “smart pool” (referred to as Smart Treasury for this use case) which acts as an automatic buyback machine and liquidity provider.
Since the $IDLE governance token launch, the forum has hosted several discussions on how to increase the on-chain liquidity of the token and provide new use cases. The community analyzed liquidity mining programs in decentralized exchanges but preferred a Smart Treasury approach to incentivize liquidity provision in the long run.
A snapshot poll confirmed the community decision in moving forward with this proposal, and a protocol grant assigned the code development task. Lastly, the peer review enabled safe program deployment that was executed with IIP-2.
A Smart Treasury contributes to increasing token liquidity and reducing swap slippage. The fees generated from swaps are added into the pool and re-invested back into the Smart Treasury.
In addition, the pool is eligible for $BAL tokens from Balancer, serving as an additional income stream for the Idle protocol.
The Smart Treasury is controlled by the IDLE governance, which can adjust parameters such as pool weights, token additions/removals, swap fees, and pause/unpause swaps.
The pool manages the IDLE-WETH pair, with a 90/10 token weights.
130,000 $IDLE from the Ecosystem Fund along with ~$40k in WETH from the FeeTreasury bootstrapped the Smart Treasury.
Protocol fees are now routed across these ecosystem contracts:
FeeCollector: this contract collects protocol fees and swaps tokens (stablecoin, $COMP, $WBTC) into $WETH using Uniswap.
Smart Treasury: it receives 80% of the profits received by FeeCollector (in WETH).
FeeTreasury: it’s the old Governance treasury, and it receives 15% of the profits in WETH.
Rebalancer: this contract manages funds allocation for Best-Yield and Risk-Adjusted streategies. Due to continuous protocol rebalances, this mechanism is expensive and required a seamless stream of ETH. It is currently receiving 5% of processed fees.
Example of fee routing scheme:
Smart Pool Parameters:
Weights: 90 / 10
Tokens: $IDLE / $WETH
Swapping fee: 0.5%
FeeCollector address: 0xBECC659BFC6EDCA552FA1A67451CC6B38A0108E4
Smart Treasury address: 0x859e4d219e83204a2ea389dac11048cc880b6aa8
FeeTreasury address: 0x69a62c24f16d4914a48919613e8ee330641bcb94
Rebalancer address: 0xb3c8e5534f0063545cbbb7ce86854bf42db8872b
SmartTreasuryBootstrap Address: 0x4ff95c83e874df9029a665a0aba31828bada9596
ConfigurableRightsPool (Smart Treasury) address: 0x859e4d219e83204a2ea389dac11048cc880b6aa8
Underlying bPool address: 0xcaf467dfe064a1f54e4ece8515ddf326b9be801e
The technical implementation can be found in this GitHub repo
Multisig TX to transfer FeeCollector ownership to Governance: 0xad11f1cd69f53acb729e243b82e2b1a706eaa82a4b032dea5ca726dd312e563c