1IPs
This section tracks all 1IPs that have made it to the Phase-4: Snapshot Vote of the Proposal Lifecycle.
Active#
All 1IPs that are currently active in the Phase-4 voting process:
Passed#
All 1IPs that have successfully passed the Phase-4 vote. These 1IPs have already been implemented or are in the process of being implemented:
[1IP-09] Collect 1inch DAO Treasury Revenue in 1INCH Token in Addition to USDC#
Full Proposal Description
Simple Summary
This proposal seeks to modify the 1inch Network DAO Treasury’s revenue collection strategy by enacting the following changes:
- Switch from buying USDC with Swap Surplus revenue to buying 1INCH when the price is lower than $1.30.
- Switch from buying 1INCH with Swap Surplus revenue to buying USDC the price of 1INCH is greater than or equal to $1.70.
Abstract
Currently, the Swap Surplus revenue stream is collected in varying tokens and swapped to USDC before it is then sent to the 1inch DAO Treasury. Once enacted, this proposal will instead swap these tokens to 1INCH as long as the market price of 1INCH is below the $1.30 to $1.70 range (see the Specification section for a detailed explanation). All swaps will be done using the 1inch Aggregation Protocol to ensure the best pricing.
Motivation
Benefits to the 1inch Network DAO include:
- Investing the DAO’s revenue stream into the protocol’s governance token while the governance token is lower than it was previously valued.
- Potential upward pressure on the 1INCH token as the DAO Treasury will be a net buyer of cheap 1INCH.
- When the token is trading at higher valuations, the Treasury will automatically de-risk by collecting revenue in stable coins.
- Holding 1INCH within the 1inch DAO Treasury will allow the Treasury to scale its value with the performance of the token.
Specification
This proposal serves as a signal from the 1inch Network DAO to 1inch Labs. Once passed, the 1inch Network DAO calls for 1inch Labs to modify the fee collection strategy with the following changes:
- When the price of 1INCH moves is below $1.30, Swap Surplus revenue shall start to be collected in 1INCH.
- When the price of 1INCH moves above $1.70, Swap Surplus revenue shall be collected in USDC.
Once the modifications have been made and tested, 1inch Labs shall deploy them. All future modifications to these will need to be done by a 1inch DAO Governance vote.
Rationale
This proposal aims to purchase 1INCH with treasury revenue when the price is lower than ~$1.50. $0.20 bands are used on either side of this buying point in order to dampen the impact that market volatility could have.
This price point of 1INCH that triggers the switch can be changed in the future via a governance vote.
Considerations
Market Risk
The USDC stablecoin composition of the 1inch DAO Treasury puts the Treasury in a very good position during any bearish market cycles — the Treasury constantly grows in dollar value while, in contrast, projects that primarily hold their own token, have had the real value of their Treasury shrink in the last 6 months.
Adding 1INCH to the Treasury composition will increase both the potential risk and potential returns. This proposal dampens the volatility by maintaining a mix of risk-on and risk-off assets.
Added Complexity
If enacted, this proposal will add complexity to the Treasury Revenue collection strategy.
[1IP-08] Simple diversification mechanism for 1inch DAO Treasury#
Full Proposal Description
Simple Summary
This proposal seeks to diversify the 1inch Network DAO’s Treasury composition be enacting the following strategy:
- Do not exchange a whitelisted set of tokens for USDC before sending to the 1inch DAO Treasury.
- These whitelisted tokens shall be: ETH, WETH, WBTC, DAI, and USDT.
Abstract
Currently, all of the Swap Surplus revenue stream is collected in varying tokens and swapped to USDC before being sent to the 1inch DAO Treasury. To start the diversification process of the treasury funds, the protocol can keep some incoming Swap Surplus tokens as collected (not swapping them for USDC).
This proposal aims to whitelist the following tokens for this treasury collection strategy:
- ETH
- WETH
- WBTC
- DAI
- USDT
Motivation
The 1inch DAO Treasury is 100% composed of USDC. USDC is a fiat-backed stablecoin pegged to USD managed by Circle.
USD experienced record inflation over the last 12 months, and will experience some degree of inflation for perpetuity. As such, the marginal spending power of the 1inch DAO Treasury is weakened unless the DAO deploys the funds in a manner that can outpace inflation.
These assets are viewed as risk-on diversification assets for the treasury:
- ETH – the native asset of the Ethereum blockchain
- WETH – ETH wrapped in an ERC20 wrapper
- WBTC – Bitcoin (BTC) is the oldest and largest digital asset. WBTC is Bitcoin wrapped in an ERC20 wrapper
Stablecoins also have inherent risks such as smart contract risks and centralization risks. Diversifying the stable coin holdings of the 1inch DAO Treasury aims to hedge against these risks. These assets are viewed as risk-off assets for the treasury:
- DAI – the decentralized collateral-backed stablecoin issued by the Maker Protocol. DAI is soft-pegged to USD
- USDT – the fiat-backed stablecoin pegged to USD and managed by Tether
Specification
To implement this proposal, GovernanceLeftoverExchanger should transfer ETH, WETH, WBTC, DAI and USDT directly to the treasury the same way it transfers USDC. All other tokens should still be converted to USDC as they are now.
Rationale
The crypto market cap took a decline in recent months. With token valuations depressed, it may be a good time to start accumulating non-stable tokens to grow the treasury.
Since exchange transactions cost some Ether to pay for the gas fees, eliminating the swapping step for these whitelisted tokens will increase the capital efficiency of this operation. It is also for this reason that large stable coins such as DAI and USDT, should be sent directly to the treasury.
Considerations
The current stablecoin composition of the 1inch DAO Treasury ensures that the Treasury is insulated from bearish market cycles. However, this also means the treasury’s funds have no way to keep pace with the rise in inflation. Adding ETH, WETH and WBTC increase both the risk and the potential rewards.
This proposal does not call for any actions to be taken with the funds currently held by the 1inch DAO Treasury.
[1IP-07] Integrate Balancer Boosted Pools in the 1inch Aggregation Protocol#
Full Proposal Description
Simple Summary
This proposal calls for the integration of Balancer Boosted Pools into the 1inch Aggregation Protocol.
Abstract
This proposal aims to grow the kinds of liquidity sources compatible with the 1inch Aggregation Protocol by integrating Balancer Boosted Pools. To fund this development, a BAL grant from Balancer DAO and Balancer DAO will be awarded to 1inch Labs upon the successful completion of the integration. Specifically, the following
- 1inch Labs shall integrate the Balancer Boosted Pools into the 1inch smart contracts, the 1inch dApp, and the 1inch API.
- The integration shall be live on the Ethereum main-net no later than 3 weeks after this proposal passes the Phase-4 snapshot vote.
- If both conditions 1 and 2 are met, Balancer DAO and Balancer DAO will transfer 20k BAL or the equivalent in stablecoins (as determined by Balancer DAO) to 1inch Labs.
Motivation
Balancer Boosted Pools are a new pool type that have been gaining traction from many DeFi protocols. These pools were previously discussed with the 1inch community on the 1inch Governance Forum as well as the 1inch Network DAO Community Call #02.
Given that this is a new pool type and requires effort from 1inch Labs, Balancer seeks to fund this integration via a payment of 20,000 BAL to 1inch Labs.
Specification
At a high level, integration of Balancer Boosted Pools would require support for Balancer’s BatchSwap function, the routing of trades through multiple Balancer pools including linear pools nested in the boosted pool and the math in the linear pools. This proposal hopes that the support for Boosted Pools is general and can later be expanded to new future Boosted Pools. The integration of Balancer’s BatchSwap function within the 1inch Network will also be able to be used for pools other than Boosted Pools which would benefit both the 1inch Network and Balancer as it would allow for cheaper execution of trades from the wider Balancer pool types. In the near future we expect to see meta pools created with the BPT of Boosted Pools, an example would be a bbaUSD/WETH pool. Routing trades through such pools would include one or more extra hop through Balancer’s BatchSwap function.
We expect that there will be many new Boosted Pools across all networks in near future, namely poos in collaboration with Ampleforth and Olympus although, below is a non-exhaustive list of currently live Boosted Pools on Ethereum L1:
- bbaUSD, containing 300mm of DAI/USDC/USDT TVL
- bbfUSD, expected to contain at least 50mm of FEI/LUSD/DAI
This is contingent on the same proposal passing through the BalancerDAO.
Upon satisfactory integration Note1, 20,000 BAL shall be sent to 1inch Labs ETH address:
0x2DF104682A61241C79eBB3ce3b2C293578bF6A9D.
Note 1: Satisfactory integration is defined as the 1inch Aggregation Protocol accurately forwarding trades through the bbaUSD and the bbfUSD pools, on Ethereum main-net, when those pools offer the optimal pricing for the end-user.
Rationale
Support for the mentioned pools will unlock $350mm of efficient TVL for the 1inch Aggregation Protocol and allow it to have access to cheap liquidity for trade routing at the moment of integration and much more TVL in the future as Boosted Pool continue their adoption. Additionally, Boosted Pools have been adapted by BeethovenX, Balancer’s Friendly Fork on Fantom and, integrating them would provide a good source for volume to 1inch on Fantom as well.
Balancer Boosted Pools are in much demand from other DeFi protocols due to their innovation in capital efficiency thus, it is expected to see many more Balancer Boosted Pools with high TVL in collaboration with other DAOs, some of which were mentioned in the discussion on the forum. Supporting Boosted Pools will position the 1inch aggregator to be able to rapidly integrate any new Boosted Pools launched.
This BAL grant would be used by 1inch Labs to fund the development of this integration.
Considerations
The technical specifics of this integration will be defined by 1inch Labs. Like all new modules they have launched, a complete internal security review and audit should be performed before this change is implemented on main-net.
Because Balancer DAO is directly funding this integration, other upgrades to the 1inch Network can be made in parallel.
[1IP-05] Add Derivative Aggregation to 1inch Network#
Full Proposal Description
Simple Summary
This proposal seeks to add derivative aggregation to the 1inch Protocol. Specifically, it calls for the following additions:
- Aggregation protocol is expanded to include derivatives
- Add derivative aggregation to the 1inch smart contracts, 1inch dApp, and 1inch API
- The first derivative supported will be Opium’s TURBO products (call options)
Abstract
This proposal aims to signal to the 1inch Foundation that the DAO wants to add derivative aggregation to the 1inch Protocol – specifically, the 1inch smart contracts, the 1inch dApp, and the 1inch API. Adding derivative aggregation to the protocol will require technical effort from 1inch Labs, and will require the support of 1inch Foundation.
Motivation
1inch is currently the leading decentralized exchange aggregator and has made a reputation of providing the best prices on token swaps. With the rise of derivatives in the DeFi space, there is a new product niche that 1inch is perfectly positioned to capitalize on: the aggregation of derivative products.
By implementing this proposal, 1inch will solve the problem of fractured derivative liquidity (just like it previously solved fractured token liquidity).
Specification
This proposal serves as a signal from the 1inch Network DAO to the 1inch Foundation and 1inch Labs. Once passed, the 1inch Network DAO calls for the 1inch Foundation to allot resources to add derivative aggregation to the 1inch Protocol and dApp, and for 1inch Labs to add derivative aggregation to the 1inch smart contracts and 1inch API.
Opium’s TURBO product is a short-dated call option:
- Community / users can “write” covered calls by pooling their tokens in order to earn yield (collect call option premiums)
- Takers (professional market makers) can buy the call options in order to gain leveraged exposure to the underlying asset
Adding Opium’s TURBO options to the aggregation UI will require coordination with the Opium community to ensure a smooth integration.
Rationale
The architecture of the aggregation protocol has not yet been defined.
Opium’s TURBO product was chosen as the first derivative supported because the Opium community was offering to help with this integration via documentation and SDKs.
Considerations
The specifics of launching an aggregation protocol will not be defined until the 1inch Foundation supports the proposal. Like all new modules they have launched, a complete security review and audit should be performed before this change is implemented on mainnet.
Since all work described in this proposal will be organized by the 1inch Foundation, this will not cost any treasury funds.
Not-Passed#
All 1IPs that did not pass the Phase-4 vote. These 1IPs did not meet the minimum quorum, and/or a majority of the voting weight was opposed to the change: