[LRFC] Lyra Protocol <> Libra Exchange Partnership Proposal

Lyra Request For Comment (LRFC)
1

Simple Summary

Allow Libra Exchange to host LYRA (LYRA-WETH or LYRA-USDC) liquidity, for Lyra Protocol to receive vote escrowed LIBRA ($veLIBRA, locked for 4 years), and to be onboarded as Libra Exchange’s launch partner.

Abstract

Lyra Protocol has proven itself to be one of the top options automated market maker platform, with a strong community and high user base. Our team team is very impressed by Lyra Protocol’s achievement, and would hope to have Lyra Protocol as our launch partner.

We are also keen to bootstrap $LYRA liquidity (LYRA-WETH and/or LYRA-USDC) on Arbitrum via Libra Exchange. This will provide an additional avenue for $LYRA holders to yield farm on Arbitrum, and chains that we have presence in, once omnichain fungible token (OFT) $LIBRA and $veLIBRA has been implemented.

As Lyra Protocol has presence in Optimism, we hope to explore more collaboration opportunities with Lyra Protocol across different chains in the future.

Motivation

Libra Exchange is a community-centric decentralised exchange and automated market maker (AMM) forked from Velodrome and Solidly for the Arbitrum (https://arbitrum.io/) ecosystem, that aims to provide low-cost transactions with minimal slippage for both highly correlated and uncorrelated digital assets.

We have plans to go beyond being just an ordinary DEX, or just another Velodrome fork, and will be creating a robust financial ecosystem that consists of a launchpad, structured trading, etc, and would like to go omnichain, by making $LIBRA (ERC-20 token) and $veLIBRA (ERC-721) omnichain fungible tokens (OFT) on LayerZero. This will allow our users and various defi protocols to earn yield, vote for emissions, do governance voting, and receive bribes in Libra Exchange’s affiliated projects on other chains in the future.

All developments mentioned above will be launched in phases.

Specifications

2% of $LIBRA initial token supply will be allocated in the form of $veLIBRA (locked for 4 years) to Lyra Protocol. Lyra Protocol can use its allocated $veLIBRA to vote for $LIBRA emissions to $LYRA liquidity pools (LYRA-WETH and/or LYRA-USDC), and to earn trading fees from these liquidity pools. Additionally, Lyra Protocol team may choose to receive bribes, and to vote for other liquidity pools. Rewards and trading fees earned will be compounded into more $veLIBRA, creating an exponential effect to early $veLIBRA accumulation. As that position grows, it will direct additional emissions to $LYRA pools, generate fee rewards and bribe revenue that can also be compounded into additional $veLIBRA for Lyra Protocol.

While the initial focus of this pilot will be to maximally compound rewards, once the $veLIBRA position reaches Lyra Protocol’s targets, Lyra Protocol can begin to repurpose fees, bribes, and emissions for other purposes. The goal being to reach a state where Lyra Protocol can bribe, and sustain liquidity without needing additional $LYRA emissions.

There will be NO minimum TVL obligations for Lyra Protocol, and $LYRA liquidity pools.

The team behind Libra Exchange has years of experience in their respective domains, and has deep blockchain knowledge. Read more about the team here: A closer look at the people behind Libra Exchange | by Libra Exchange | Medium.

Security is the top priority for the team, especially when we witnessed the unfortunate hack on a top DeFi protocol just weeks ago. Libra Exchange has underwent an automated smart contract audit with Salus. The automated scan was done at the highest sensitivity, and the Libra team is informed of all high risks, and all fixes has been acknowledged and worked on. Full manual audits with top firms will commence after public sale.

Link to report: contracts/audits at master · LibraExchange/contracts · GitHub

Salus (Salus) is a Binance Labs portfolio and a trusted security partner in Binance and BSC ecosystem.

Links:

Website: https://librax.io
Gitbook: https://docs.librax.io
Twitter: https://twitter.com/LibraExchange
Medium: https://libraexchange.medium.com
Discord: Discord

We will only need Lyra’s Arbitrum treasury wallet address to transfer the $veLIBRA to.

Rationale

As we at Libra Exchange is planning to launch a full suite of defi solutions across multiple chains, we hope to work with protocols that share the same vision as us, since Lyra has presence on Optimism network. We hope to not only partner with Lyra on Arbitrum, but other chains that Lyra has presence in in the future as well. Lyra is one of the top, most innovative and trusted defi options protocol on Arbitrum. Liba Exchange liquidity providers could potentially go to Lyra Protocol to hedge impermanent losses associated from their short gamma positions due to their LP positions.

Test Cases

N/A

Copyright Waiver

Copyright and related rights waived via Creative Commons — CC0 1.0 Universal

4 Likes
2

This proposal by Libra looks good for Lyra, as there are no obligations for Lyra.

I would urge Lyra to look at the audit and determine Risk.

How does Libra differentiate from Camelot?

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3

Hi MasterMojo

Thank you for your questions. There are a few factors differentiating us from Camelot

  1. We are more of a Velodrome fork with ve(3,3) tokenomics model and gauge voting system (Introduction - Libra Exchange)

  2. We are intending to go omni-chain, and will have presence across multiple chains in the future. Stargate Team will be giving us technical advice and guidance once the community voting has been completed (Commonwealth).

  3. Our public sale will have a hardcap imposed (Stop taking in new bids after 6.6M USDC has been raised), unlike Camelot’s public sales which has led to a lot of unhappiness among the community (LIBRA Public Token Sale - Libra Exchange).

Thank you!

4 Likes
5

The proposal seems interesting but cannot deny there are some holes in it that rise my concerns.

  • Anon team with non detailed verifying experience.
  • No audit by established firm

It’s ok to be anon team but cannot verify anything done before. LYRA is a reputable protocol that has earned it’s reputation with hard work and we could not risk a possible backlash supporting some unproven project. What happens if it ends up being a rug-pull or a low quality project? We cannot suggest to use it to our token holders without doing some due diligence first.

For reference we have the self description of the team:

  • Audit
    Made by a simple scan of smart contracts deployed on Polygon (not arbitrum?). The audit even remarks that a proper manual audit should be done.

Unfortunately many rug-pulls recently have to make us cautious. I would be happy to receive more feedback from LIBRA team and keeping it open for both protocols to work together.

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6

Hi AlvaroHK,

Thank you for your feedback. Here at Libra, we completely understand your concern and I will like to address them.

  1. Anonymous team: as you correctly pointed out, despite being normalised in the industry, anon teams are definitely worrying. In the long run, we do have plans to meet the community without a facade but for the time being, we’re happy to speak to trusted community drivers of Lyra privately, and share more about ourselves.
  1. Audit results
    I can see where the confusion is from here and I’m happy to explain. The automated scanning tool that Salus has provided requires the contract to be live, and the testing is done at the highest sensitivity to ensure we are not missing any critical errors. Contracts are deployed on Polygon just for testing purposes, and it is not representative of the final contract addresses. Fixes are being worked on as we speak and deployment on Arbitrum will begin soon. Security is our upmost concern here at Libra, and we have already engaged two other renowned auditors that will begin manual audit upon confirmation. Moreover, Salus is a Binance Lab’s portfolio co, and has been very active/known within the BSC community, hence it’s reputation and trustworthiness should not be an issue

I will like to take a moment to thank you again for the effort in vetting us, and I welcome any other questions, concerns or queries.

6 Likes
7

Good feedback. Thanks!

3 Likes
8

Thanks for the proposal and welcome to the community.

Could you please edit the post so that it is structured as required by the template:

  • Simple Summary
  • Abstract
  • Motivation
  • Specification (missing)
  • Rationale (missing)
  • Test Cases (missing, if not relevant just say N/A)
  • Copyright Waiver

I think most of the relevant information is there, we just need it to conform the template.

One question I have is what actions need to be taken with the $veLIBRA? Since the governance system is autonomous, the relevant transactions will need to be explicitly defined.

2 Likes
9

Hi mjs,

Thank you for your feedback, and I have structured the post as required. Regarding your questions with $veLIBRA, Lyra team will use it to vote for $LIBRA emissions to be directed to $LYRA liquidity pools (such as LYRA-WETH, etc), or any liquidity pool that Lyra team deems fit. But ideally, most of the vote should go to $LYRA liquidity pools.

Trading fees and rewards collected by Lyra team every week should be recompounded into $LIBRA, and lock back into $veLIBRA. We will leave it to Lyra team to decide how much trading fees and rewards collected to compound into $veLIBRA, and how much to be kept into your treasury.

This arrangement will give the Lyra team more votes over the long run, and able to sustain emissions into $LYRA liquidity pools, without having Lyra to dilute $LYRA token.

Bribes are optional for now, we will submit a separate proposal should we need Lyra Protocol to bribe other $veLIBRA holders.

3 Likes
10

Thanks for the updates. I would still urge you to consider revising the structure of the proposal so that the information in each section better reflects the intent (i.e. the proposal is mostly defined in the “motivation” section rather than in the “specification”).

This will help improve the chance of the proposal being approved by token holders. Feel free to look at any of the other LRFCs on this forum.

3 Likes
11

Hi! I have made the changes! Hope it’s good this time!

2 Likes