Simple Summary
Deploy and launch Lyra V2.
Abstract
This proposal outlines the sequence needed to launch Lyra V2. Once the system is operating reliably, ownership of the contracts will be transferred from the DAO multisig to the on-chain governance system.
The sequence is as follows:
- If approved on snapshot:
- Deploy Lyra Chain, Protocol and Exchange
- Fund security module
- V2 mainnet launches
- V2 incentives start
- If approved onchain
- Ownership transferred to onchain governance
Motivation
This proposal is a follow-up to the introduction of Lyra V2. The remaining v2 work has been completed, and thus, it is time to seek community approval to launch.
Specification
Before describing the steps to launch, we begin by visualising the V2 architecture at a high level. This helps the reader understand the relationship between the core software components (chain, protocol, exchange), the entities that work on behalf of the DAO (governance, foundation, service providers), the different types of users that interact with the system and the flow of value back to the DAO.
V2 Components - Core software
- Lyra Chain - Ethereum rollup built with the OP Stack.
- Lyra Protocol - Generalised margin and risk protocol.
- Lyra Exchange - Self-custodial exchange.
Entities - Work on behalf of the DAO
- Lyra Foundation - Not-for-profit legal entity that acts on behalf of the Lyra DAO.
- Service Providers - Assist the Lyra DAO with various components of V2.
Users - Interact with Lyra V2
- Lyra Stakers - coordinate Lyra governance
- UI Traders - access Lyra Exchange via GUI
- API Traders - access Lyra Exchange via API
- Integrators - build on Lyra Protocol
- Protocol builders - launch entirely new protocols on Lyra Chain
- Ethereum Stakers - provide the economic security to secure Lyra Governance
Deploy Lyra Chain
The first step in launching V2 is to deploy Lyra Chain.
Summary
Lyra chain is an Ethereum roll-up built using the OP Stack. It is a smart contract platform that provides a high-performance foundation for the V2 protocol whilst inheriting the security of Ethereum. To learn more about Lyra Chain, read the introductory v2 proposal or this blog post.
Accessing Lyra Chain
Users can choose between the standard Optimism bridge or a fast bridge developed by Socket. Documentation for the Socket bridge can be viewed here and here.
Lyra Chain Configuration
| Name | Value | Notes |
|---|---|---|
| RPC URL | rpc.lyra.finance | Remote Procedure Call for interacting with Lyra Chain |
| Epxlorer URL | explorer.lyra.finance | Graphical interface for transactions and blocks |
| Chain ID | 957 | Unique identifier for Lyra Chain |
Deploy Lyra Protocol
The second step in launching V2 is to deploy the V2 Protocol to Lyra Chain.
Summary
The Lyra Protocol is a series of smart contracts that collectively create a generalised risk engine, capable of portfolio margin. To learn more about the protocol, please review the v2 whitepaper.
V2 Source Code
| Name | Description | Link |
|---|---|---|
| V2-core | The core version 2 protocol | GitHub - lyra-finance/v2-core |
| V2-matching | Contracts that enable sequential matching | GitHub - lyra-finance/v2-matching |
| lyra-utils | Commonly used libraries in the Lyra Protocol | GitHub - lyra-finance/lyra-utils: Commonly used libraries in the Lyra protocol |
Audit
The protocol was audited by Sigma Prime and the report is available here: public-audits/lyra-finance/review.pdf at master · sigp/public-audits · GitHub
Configuration
The initial configuration of parameters is available here: https://lyra-finance.notion.site/Lyra-V2-Parameters-2d02b3c941e64292b0df6b925aea31b7
Deploy Lyra Exchange
The third step in launching V2 is to deploy the Exchange.
Summary
Lyra Exchange is a self-custodial exchange built with Lyra DAO’s open-source matching service. It has been built from the ground up to be competitive with the world’s largest crypto derivatives exchanges (not just DEXs).
Accessing Lyra Exchange
There are two ways to access Lyra Exchange, via the client and directly via the API.
- Client - Recommended for the majority of users who prefer to trade via a graphical user interface.
- API - Recommended for advanced and professional traders who prefer to trade programmatically. Documentation is available here.
Exchange Fee Structure
Lyra Exchange is the initial “Risk Assessor”, which means it can apply for an alternative fee structure. This model is intended to allow exchanges building on Lyra Protocol the ability to offer pricing that is in line with popular centralised and decentralised competitors. The initial fee structure is as follows:
| Instrument | Maker | Taker |
|---|---|---|
| Perp | 1bp | 6bp |
| Option | 3bp | 4bp |
All fees charged by Lyra Exchange are owned by the Lyra DAO. Fees may be used to cover operational expenses such as paying gas costs on behalf of users.
Launch Mainnet
The fourth step of launching is to enable mainnet trading. Once all three components are deployed, mainnet trading will be enabled. Once the system is deemed to be operating correctly, the incentive program will begin (details proposed separately). The start date may be delayed if there are technical or liquidity issues.
Transfer Ownership to Governance
The final step of launching V2 is to transfer ownership of the V2 contracts from the DAO multisig to the onchain governance system. Lyra has a fully autonomous on-chain governance system that is managed by LYRA holders. It will enable direct token holder governance of V2, including the chain, protocol and exchange. After the system is operating smoothly, ownership will transfer to the on-chain governance system.
Launching New Markets
In the period before ownership is transferred to onchain governance, the DAO can launch markets and collateral assets with sufficient liquidity and are deemed low risk. Once ownership has been transferred any new market will need to go through the full governance process.
Deprecate Newport
Once V2 is live, the Newport release will be migrated to v1.lyra.finance. Users will be able to withdraw their LP positions and close positions at this interface up until December 20 2023. After this date, users will need to interact directly with contracts to withdraw assets and close positions. The last expiry available on the Newport contracts will be on January 26 2024.
Rationale
The rationale has been addressed throughout the proposal.
Test Cases
Test cases are included with each source code repository.
Configurable Parameters
N/A