[READY] [GF: Phase 1 Proposal] dForce

ARCHIVED & OLD Missions Governance Fund: Phase 1
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Project Name: dForce

Author Name: Margaret

Number of OP tokens to claim: 300,000 OP

L2 Recipient Address: 0x69C1a51711B061E5935c648beb16e349898B17dF

Defillama TVL (at snapshot): $5.4m

Optimism alignment (up to 200 word explanation):

dForce is highly aligned with Optimism with a comprehensive set of DeFi protocols covering stablecoin, lending, trading. dForce is currently deployed on Ethereum, Optimism, Arbitrum, BSC with a TVL of over $255m. It is currently #1 lending protocols on Arbitrum and #4 lending protocols on BSC by TVL.

USX is an over-collateralized stablecoin implementing both Pool model and Vault model. USX can be minted through Vault (single collateral & risk-isolated), or via borrowing from supported lending protocols (pool-based & multi-collateral & market-driven rates) directly. Powered by liquidity modules, USX can effectively combat liquidity shortage by adding or removing liquidity from supported lending protocols in response to market demands, and generate profits from multiple sources for DF holders.

USX and dForce lending protocols have undergone extensive code reviews and security audits by Trail of Bits, ConsenSys Diligence, CertiK, Certora (formal verification), with a bug bounty launched through Immunefi. We have withstood a number of market downturn and are battle-tested with more than three years of operation on-chain.

dForce is thrilled to join the Optimism ecosystem and service its users with secure and reliable DeFi products.

Proposal for token distribution (under 1000 words):

Distribute OP tokens to incentivize users, developers, partners who can help grow dForce on Optimism.

How will the OP tokens be distributed?

Distribution of OP will be decided by DF holders through governance, with the following distribution schedule proposed:

  • 50% for users who use dForce protocols on Optimism through liquidity mining
  • 30% for developers who build on dForce protocols
  • 20% for marketing campaigns (Optimism focused events)

How will this distribution incentivize usage and liquidity on Optimism?

dForce is currently deployed on Ethereum, Optimism, Arbitrum, BSC, with a couple of others underway. We have reached a TVL of $255m, according to DeFiLlama.

Most of the OP tokens will be used to educate market participants on how to use dForce on Optimism and ultimately returned to dForce users on Optimism through liquidity mining.

Why will the incentivized users and liquidity remain after incentives dry up?

20% of the OP tokens will be allocated to marketing campaigns which help users get to know Optimism, and 50% of the OP tokens will be returned to users who actually contribute TVL to the Optimism ecosystem. Once they migrate to Optimism and are accustomed to the ecosystem, there is a good chance for them to become regular users and reside on Optimism.

We also plan to use the remaining OP tokens to reward developers who innovate and build on dForce protocols to explore more interesting use cases which is beneficial to Optimism in the long run.

Over what period of time will the tokens be distributed?

We anticipate that these incentives will be distributed over a 6-24 months’ time frame.

How much will your project match in co-incentives?

dForce DAO already has DF token allocation to facilitate the expansion on L2, which will be utilized to reward participants on Optimism.

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Hey @MGGYY, thanks for submitting this proposal. I’ve added [DRAFT] to the title above.

To get this ready for a vote, you should:

  • Circulate this proposal in #gov-temp-check on Discord for community feedback.
  • When you feel like this proposal has good buy-in, including from at least one OP delegate, you can update [DRAFT] in the title to [READY] and we’ll include it in the next voting cycle on Snapshot.

The first voting cycle for GovFund Phase 1 proposals will run June 22 – July 6.

More details on the process above can be found in the Operating Manual or on Gov Fund Phase 1: How to create a proposal

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This proposal needs to get passed. I am a long time users of #dForce and it’s one of the best lending protocol out there in the DeFi space. Can’t wait for the rewards :laughing::laughing:

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What a great proposal and a great chance for both projects!

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Know dForce core team members for a long time, they are a group of persons who have passions, creativities, judgements. They build dForce protocol for a while, always keep making new stuff and make things happen. Would be glad to see this proposal passed, this gonna be a win-win situation for both protocols.

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This proposal like most others seems to be just to provide liquidity mining which provides no long term adoption.

Why would Optimism grant 30% for people who build on your protocols? I would see if it was something that in return brought value to Optimism but cant see that any where.

What are the marketing campaigns? This is the only thing of possible value here, however there is no information at all.

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50% for users who use dForce protocols on Optimism through liquidity mining

Does not work long term, this will only boost artificial liquidity

30% for developers who build on dForce protocols

is this only applies to OP chain ?

We also plan to use the remaining OP tokens

remaining of what ?

dForce DAO already has DF token allocation to facilitate the expansion on L2, which will be utilized to reward participants on Optimism.

is this equal match of OP token requested ?

here is a good chance for them to become regular users and reside on Optimism.

50% allocation and you are depending on “chance”

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I agree with @OPUser, there doesn’t seems to be many projects with a long term focus.

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Thanks for your feedback. We believe a sustainable and vibrant ecosystem depends on builders, product development, and innovation for sure.

We plan to provide developers with incentives for integrating with dForce protocols or developing interesting use cases on top of dForce protocols, creating financial services and products for end-users in a transparent, efficient, and creative manner.

Example ideas would be DEX integrating with dForce Lending as a yielding venue for users to earn rewards from multiple sources (LP fee, deposit interest, and possibly dual mining rewards), or integrating with USX to facilitate derivative trading, etc.

Anyone can propose interesting idears on how to further grow dForce on Optimism (yes, the grants will be distributed developers building protocols with dForce as a base layer on Optimism ONLY)! We believe this will benefit the adoption of Optimism significantly in the long run.

dForce resides on Ethereum, BSC (#2 lending protocol), Arbitrum (#2 DeFi protocol), Optimism, Avalance, KAVA with a TVL of $243 million. Marketing campaigns will be carried out in different formats, including but not restricted to (subject to dForce DAO’s approval):

  • With a multi-chain deployment strategy, dForce makes it easier for users to enter the Optimism ecosystem: for example, you can borrow $USX against $ETH on Ethereum, and bridge $USX to Optimism at near-to-zero cost through dForce Bridge. Then you can borrow $OP against $USX to participate in more DeFi activities. We can use $OP rewards to incentivize users to borrow $OP and other stablecoins from dForce Lending on Optimism.

  • Fund other Optimism focused events.

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I think this is a great proposal, a reasonable commitment of resources with a strong long-term value proposition.

I would like to support this proposal and also ask if, the project will be intently reaching across to other L2 platforms outside of OP? As I believe this would enhance the network effect and expansion of the community greatly.

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yes, dForce is No.2 protocol on Arbitrum in terms of TVL

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liquidity mining is important to boostrap Optimism ecosystem, once that kickstarted, the network effects will form;

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  1. The $OP incentives will be distributed over a 6-24 months’ period, which we believe is a reasonable time frame for sustainable liquidity to reside in the Optimism ecosystem.

dForce already deployed on Ethereum, BSC (#2 lending protocol), Arbitrum (#2 DeFi protocol), Optimism, Avalance, KAVA with a TVL of $243 million. With a multi-chain strategy, dForce makes it easy for users from different worlds to tap into the Optimism ecosystem. For example, you can borrow $USX against $ETH on Ethereum, and bridge $USX to Optimism at near-to-zero cost through dForce Bridge. Then you can borrow $OP against $USX to participate in more DeFi activities with much lower gas costs.

USX is also powered protocol liquidity modules (Protocol-Direct-Liquidity-Provision & Protocol-Owned-Operator). The former is similar to the D3M module MakerDAO deploys with Aave, utilizing a bound-range interest rate to adjust USX’s supply on secondary markets (lending protocols, pool-based bridge, stable swaps with minimized impermanent loss) in response to market demands. The latter aims to take over USX’s liquidity on DEXes - once they become protocol-owned liquidity, it will permanently reside in the Optimism ecosystem.

  1. Yes. The grants will be distributed to developers building protocols with dForce as a base layer on Optimism ONLY.

  2. The remaining 20% (50% through liquidity mining, 30% for developers, totaling 100%)

  3. Yes. We aim to match the $OP rewards on a 1:1 basis, but this has to be voted and jointly decided by $DF holders through governance.

  4. As captioned in #1 & #3, cross-chain liquidity conduit, protocol-owned liquidity, developer grants, together with liquidity mining, we believe will greatly enhance the use of dForce on Optimism with a win-win outcome.

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Thank you for providing more information.
Overall the distribution is looking good and your number of token request is also reasonable looking at time frame.

Yes. We aim to match the $OP rewards on a 1:1 basis, but this has to be voted and jointly decided by $DF holders through governance.

For this, if you are planning to match this, is it possible to do a temp check before hand with your $DF holders. “If OP proposal is approved, we will match it 1:1”, as of now I am not sure if you will match or not.

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Sure. dForce community has demonstrated a strong interest and support to L2 expansion, with Optimism standing in the front rank. We believe we are able to match it 1:1 upon OP approval.

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I think the ask is reasonable, this is a relatively proven team, incentives are matched. Liquidity mining isn’t a great mechanism but it is what we have at the end of the day.

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This looks reasonable to me and will be voting for

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dForce should get this distribution incentiviz, Defi summer is on!

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btw, dForce already kicked off liquidity mining on Optimism

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dForce has launched liquidity mining on Optimism!

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