AIP-015: Akropolis to integrate Liquity protocol as a frontend operator

Governance Proposals
#1

Snapshot voting: Snapshot

Author: MetaLamp

Abstract

This proposal is about integrating Liquity to Akropolis platform and the first stage of frontend optimization to ensure higher loading speed and smoother frontend work.

In our opinion, adding the Liquity protocol can be a win-win solution for both AKRO users and the team itself. It would not require a lot of work, since Liquity provides all the tools to implement this solution.

What is Liquity?

Liquity is a decentralized borrowing protocol that allows for interest-free loans secured by ETH.

Liquity favours various frontends instead of one. They provide the SDK and Launch Kit for its deployment to other teams, who in turn earn commissions from usersā€™ transactions with the protocol. The teams that deploy the frontend are called Frontend Operators. A list of reliable operators can be found on the LIQUITY Foundation website. Each operator chooses what percentage of usersā€™ commissions to keep - this percentage is the operatorsā€™ income. On average, frontend operators take 1% of all transactions at their site, but there are also those who have 0% and 5% commission.

The overall TVL is around $577 million.

Integration with AKRO

Akropolisā€™ motto: DeFi yeld on autopilot.

Becoming a frontend operator, Akropolis provides users with a few buttons to get yield by providing liquidity to the protocol:

  • Secure Liquity by providing LUSD to the Stability Pool. Earn liquidation gains (in ETH) and LQTY rewards.
  • Stake LQTY to earn the fee revenue paid for borrowing or redeeming LUSD.

Users can get LUSD by opening a Trove (borrowing LUSD by providing ETH) or getting LUSD on Uniswap.

What is the benefit for Akropolis?

Akropolis platform can earn commissions for providing access to Liquity through its frontend - starting from 0.1% of the loan issuance fee.

To incentivise users, The Frontend Operators may set a rate between 0 and 100% that determines the fraction of LQTY that will be paid out as a kickback to the Stability Providers using the frontend. If a frontend set the kickback rate to 60%, their users would receive 60% of their earned rewards while the frontend receives the remaining 40%.

Read more here.

Scope of work:

Liquity integration:

  1. Creating a module for interaction with the contract;
  2. Form for creating and closing a Trove - a layout and connecting logic;
  3. LQTY staking module;
  4. Stability pool module;
  5. Transaction History;
  6. Token cards for the yield calculator page;
  7. General information about the protocol + information about the userā€™s balance, etc. within the protocol;

Frontend optimization:

Adding a proxy service that proxies requests to the node, collects them into sets of 10 and sends them out, with the research of possibility to use various Alchemy keys.

In our next proposal, we will also add optimization through introducing backend for frontend operations, which will increase the loading speed and allow for various improvements and features on the frontend side.

Time needed: up to 33 working days for Liquity integration and 4 days for frontend optimization; around 37 working days in total.

Total Costs: $9065

Vote

  • FOR: Integrate Liquity and start frontend optimisation.
  • AGAINST: Do nothing.
4 Likes
#2
  • FOR: Integrate Liquity and start frontend optimisation.
  • AGAINST: Do nothing.

0 voters

2 Likes
#3

Iā€™ve never used Liquity. Sounds interesting. Not an anonymous team. How many front-end operators do they have and are there any successful cases recently launched?

I found 4 security audits, 3 from Trail of Bits https://www.trailofbits.com/ and one from Coinspect Liquity Audit

UPD: there are 18 frontend operators Liquity | Frontends List - Use Liquity most of them have kickback rate 99-100%

3 Likes
#4

I think this integration is really good! Never used Liquity Protocol as well, but did some fast research and they looks pretty decent, their stable coin (LUSD) just entered top 10 stable coins, so they are gaining traction. As @lynX said team is not anonymous which is strong point. And more integration is always better for the dApp!

2 Likes
#5

I will most likely vote for) but letā€™s try to calculate ROI. Costs: 37 working days and $9065. I think the income of the Akropolis will most likely be equal to 1% (since the kickback rate of most competitors is 99%. or should we start with 95% as сp0x and then adjust as needed, what do you think?)

What TVL is needed and for how long to recoup the costs (letā€™s imagine some scenarios)? Will there be any other recurring maintenance costs?

I would calculate it myself, but I have no idea about the math of LQTY rewards. Hope somebody can help))

1 Like
#6

There is a formula for calculating the rewards, as you told, it would depend on the amount of usersā€™ deposits coming through the frontend (and with rewards in token, it would depend on the token price) - Frontend Operators - Liquity Docs

Recouping the costs (that come out of dev fund) will entirely depend on the people using our frontend & marketing - so we would love people helping us with marketing/sharing the word :slight_smile:

As for maintenance costs - it would depend on the maintenance complexity tbh, and if there is a need for additional maintenance that comes with a cost, there will be an update here on that topic! Either way, MetaLamp wanted to become a long-term contributor and it wonā€™t be the only proposal from them - so some maintenance costs might be included in the future proposals.

2 Likes
#7

Posting a link to the Snapshot voting here as well!
https://snapshot.org/#/akropolis.eth/proposal/0x45353dfb794cfac8151a229746755eb342f7472fdccebb20a814cda63c52475c

1 Like
#8

Hello everyone,

Weā€™d like to share some updates regarding our grantā€™s progression. Weā€™re committed to delivering a smooth Liquity integration alongside optimisation, and we want to share why we need more time to complete the grant. Read below!

Our journey into optimizing the service has been an interesting one. The initial strategy we proposed didnā€™t meet our expectations, leading us to explore several alternative routes. Weā€™ve not quite hit the home run we were hoping for yet - but we continue working on the solution.

As for our design work, itā€™s a bit like painting a masterpiece - sometimes the artist requires a little more time to add those final touches. Weā€™ve dedicated a significant amount of additional time to both implementing new designs and refining existing screens. Instead of following the route of most aggregators who added Liquity with ā€œas isā€ designs, we wanted to improve the user experince and make the process of lending, staking and so on easier to understand.

Concerning our timeline, a combination of overlapping holidays and well-deserved vacation time for team members has somewhat elongated our schedule. Remember, even developers need a break to recharge and come back more creative and productive than ever!

Hereā€™s the good news - weā€™ve made substantial progress! Trove functionality is ready, although we will refine its design. The Staking feature is complete, and our diligent team member, Olga, is working on perfecting the transaction table.

As we look ahead, our next steps involve setting up the liquidity pool and updating Troveā€™s layout. Weā€™re getting closer to the finish line and will share more updates as they come!

2 Likes
#9

Please apply in Bitstamp to be listed !

#10

Some time has passed, do we have any statistics on profitability from integration with Liquidity and what happens to this rewards? Is this works as an AKRO buyback?