The 1inch DAO treasury on Arbitrum received an airdrop of 2,575,405 $ARB tokens in April of 2023. This proposal calls for swapping all $ARB tokens for USDC on Arbitrum One, then bridging those USDC funds to the 1inch DAO treasury on Ethereum mainnet.
+The primary motivation behind this 1IP is to maximize the value from the received $ARB tokens. By swapping them for USDC, a dollar-pegged stablecoin, we can put those funds to work to grow the 1inch Network. This action strengthens the long-term financial positioning of 1inch by reducing our exposure to volatile assets.
+This is a signaling proposal as the 1inch DAO Treasury on Arbitrum is managed by a 7-of-12 multisig – all transactions specified herein shall be manually executed.
+Choosing USDC over simply holding $ARB tokens reduces the financial risks associated with holding volatile assets. Best efforts should be given to get the best swap rates for such a large amount so that the trade can be executed with minimal slippage
+Subsequently, bridging these assets to Ethereum mainnet allows the funds to be controlled directly via 1inch DAO governance using Snapshot’s reality.eth module.
+All DeFi transactions contain potential costs and risks that should be taken into account. These include transaction fees, bridge fees, or any slippage costs during the swap process. Potential bridge service security risks should also be assessed.
+The Warden Finance team has delivered the analytics dashboard proposed in 1IP-18. This proposal aims to secure the second part of the payment that was meant to be disbursed upon delivery of the dashboard.
+The dashboard can be accessed here: https://analytics.1inch.community/
+While the majority of the features from the original proposal have been incorporated into the dashboard, some data could not be reasonably accessed via the Dune API due to the excessive amount of data and the need for frequent updates, which would exceed the current plan limits. As a result, we have removed the related features from the initial proposal and adjusted the pricing accordingly. We remain open to adding these features in the future if the necessary data becomes available.
+Here is the list of features that were included in the dashboard along with those that were removed:
+Users metrics
+DAU, WAU, MAU
+Cumulative user count
+Transactions
+Daily, weekly and month trade count
+Volume
+Daily volume, weekly volume, monthly volume
+1inch Fusion KPIs
+Total orders, volume, unique users (current + historical)
+Top transactions
+Top traders
+Explore and compare resolvers
+Compare and access all resolvers in a leaderboard view - Sort by unicorn power, staked 1Inch, all-time fees, total orders, …
+Breakdown per resolver (Total orders and volume, Historical orders and volume, Historical fees, Staked 1inch / unicorn power / lockout period)
+Protocol treasury balances per token.
+Cumulative treasury revenue over time
+List of treasury transactions
+Protocol revenues (daily/weekly/monthly)
+Revenue as a percentage of volume (daily/weekly/monthly)
+Token price over time
+Token unlock supply schedule over time
+TVL
+Amount of staked 1INCH (st1INCH)
+Estimated gas cost in USD
+Gas price in GWEI chart
+We also commit to providing 1 year of hosting and maintenance for this website.
+Volume by underlying liquidity source
+Breakdown of the number of trades per DEX
+List and search individual transactions
+Staking rewards
+By removing features, we are also adjusting the final payment. The initial cost of this project was 85k USDC, with 25k USDC paid upfront and 7.5k USDC withheld due to the feature removal.
+This results in a final amount of 52.5k USDC, which we request to be sent to the following address: 0x70cd17186aae48729f12dBA63Ba5a9aBE7b4116D.
Enforce an Ethereum gas fee limit in the 1inch Fusion mode smart contracts, setting a priorityFee cap based on the block’s baseFee.
+Implement a penalty system, in which violators are barred from filling Fusion mode orders.
+Reduce the Unicorn Power (UP) requirement for Resolvers from 10% to 5%.
+The proposal aims to both decrease operational costs for Fusion Mode Resolvers and encourage broader participation by introducing a smart contract-enforced priority gas fee limit and a penalty system. Furthermore, by lowering the UP requirement for Resolvers, the Fusion Mode ecosystem will be more accessible.
+Currently, Resolvers face discouragingly high operational expenses, primarily due to inflated gas fees during auctions. This issue is exacerbated due to resolvers competing with each other, leading to “resolver gas wars”. The costs of these wars are ultimately borne by participants in the 1inch Network, either through resolvers making smaller profits on filling orders or Fusion Mode users getting worse rates on their trades.
+In addition, new resolvers are deterred by the high UP requirement for participation. These proposed changes directly address these issues by regulating gas costs and reducing entry thresholds.
+Smart Contract-enforced maximum gas fee: Implement a rule on the 1inch Fusion mode smart contracts that caps priority gas fees. All attempts to circumvent this restriction, including direct payment to a block builder’s coinbase, will result in a violation. Violations of this limit should trigger the enforcement of penalties.
+For blocks with baseFee <10.6 gwei – the priorityFee is capped at 70% of the baseFee.
+For blocks with baseFee between 10.6 gwei and 104.1 gwei – the priorityFee is capped at 50% of the baseFee.
+For blocks with baseFee >104.1 gwei – priorityFee is capped at 65% of the block’s baseFee.
+Penalty mechanism: Offending resolvers will be barred from filling Fusion mode orders.
+First offense – official warning
+Second offense – one (1) day block from filling orders
+Third offense – seven (7) day block from filling orders
+Fourth offense – thirty (30) day block from filling orders
+Fifth offense – three-hundred sixty-five (365) day block from filling orders
+Decrease in UP threshold: Propose to lower the UP requirement for Resolvers from 10% to 5% via an alteration in the DAO’s governance smart contract.
+Implementation:
+If successfully passed, this proposal will be implemented on October 16th.
+This proposal signals to the 1inch Foundation and 1inch Labs to implement this proposal:
+1inch Labs should deploy the changes described in this proposal
+1inch Foundation should change the public Fusion Mode Terms of Use for Resolvers and communicate these changes with Resolvers
+The 1inch Foundation should help enforce the penalties described in this proposal
+Restricting the priority gas fee protects resolvers from excessive operational costs, thus maintaining long-term sustainability. The baseFee ranges described in the specification section are based on historical data and aim to allow 99.99% of transactions to get included within 15 blocks.
+A penalty mechanism reinforces compliance amongst the participants while preserving fair competition.
+Lowering the UP requirement expands the number of resolvers, promoting diversity and robustness in the Fusion Mode ecosystem.
+Enforcing these changes would entail updates to the Fusion mode backend and should be thoroughly tested.
+References
+ + +Simple Summary
+MakerDAO recently increased its DAI Savings Rate (DSR) from 1% to 3.49%, at the time of writing this proposal the DSR is 5%. +We recommend swapping $1M USDC to DAI and staking a total of $1M DAI into the MakerDAO DSR to generate a meaningful yield for the 1inch DAO.
+Motivation
+MakerDAO is a veteran DeFi protocol focused primarily on borrowing with its native Stablecoin DAI. As the 1inch DAO’s source of revenue is on the verge of being shut off if [1IP-28] Discontinue Swap Surplus Collection passes, it is essential to ensure that our assets are utilised to generate yield for the 1inch DAO. MakerDAO provides one of the safest places to generate yield by using the native DSR for DAI.
+How does the DAI Savings Rate (DSR) work?
+One of the monetary policy levers that MakerDAO Governance regulates is the DSR, which aids in balancing the supply and demand of DAI. This global parameter is often changed to account for fluctuations in the DAI economy’s market circumstances over short periods of time.
+The Stability Fees collected from Vaults are used to fund the DSR. For instance, a DSR of 2% might be funded if the average Stability Fees paid on CDPs is 3%
+These two mechanics offer tools to ensure Dai stability throughout the short and long term.
+In Multi-Collateral Dai, MakerDAO Governance selects a Rates Policy Oracle with restricted access to change the DSR in real-time within a predetermined time frame stipulated by governance as part of the governance process. Other crypto-economic safeguards for the Rates Policy Oracle include a localised emergency shutdown mechanism, which enables the Maker Governance Risk Teams to quickly move to shut down the DSR Oracle until a vote by MKR holders may replace it.
+The Risk Team, or a group of Risk Teams, work together to operate the Rates Policy Oracle under the direction of Maker Governance to implement the Rates Policy in accordance with the predetermined objective.
+Specification
+This investment proposal will be using the 1inch Aggregator to swap 1 million USDC to DAI through the PSM and then depositing the DAI into the DSR and minting sDAI directly.
+In order to achieve this, this proposal has two different payloads.
+This proposal suggests using SavingsDAI (sDAI) which is an ERC20-compliant token that conforms to the ERC4626 specification.
+By using sDAI, the 1inch DAO can hold sDAI directly in the 1inch Treasury to represent its DSR yield.
+Next Steps
+If this proposal passes, the two transaction batches will be executed to facilitate this investment.
+