Use of ETH by Dev team for testing purposes

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1. Context

The AMM market keeps expanding, with already 30+ players identified across Ethereum, Ethereum layers 2 and other blockchains.

Although not complete, the following visual provides a fair representation of the market: https://twitter.com/pironidi/status/1462435625383219200?s=20

AMMs compete for liquidity and best prices. Some innovative protocols stand out by their offering and / or approach to liquidity, creating very interesting use cases to study.

2. Proposal

To have a better understanding of those protocols and competitors, Ref’s dev team suggests the use of 5 ETH from the DAO in order to test and collect ‘data intelligence’ from direct and indirect competitors.

The main objective being the improvement of Ref solution, via the potential deployment of proven and market-approved features.

3. Scope

The scope of study would mainly include:

  • AMMs
  • Lending and Borrowing protocols
  • Aggregators
  • Payments
  • Analytics
  • Staking
  • Insurance
  • Derivatives and Margin trading
  • Asset management tools

The underlying smart contract infrastructure is multi-chain and can include:

  • Ethereum
  • Ethereum L2 (Arbitrum, Fantom, Optimism, Polygon)
  • Other blockchains (Algorand, Aurora, Avalanche, BSC, Cosmos, Elrond, Heco, Klaytn, Kyber, Near, OKEXChain, Polkadot, Secret, Stellar, Terra, Tron, xDAI, Zilliqa)

4. Testing approach

When the team targets a specific protocol, the following options MUST be considered, before any Mainnet interactions:

  1. Testnet environment: can the Testnet env and version offer a similar experience (both at the execution and functional levels)?
  2. Local fork: can the dev team deploy a local fork and simulate a similar production experience at a low dev cost AND below the opportunity cost of the current Roadmap?

In case the above alternatives to Mainnet testing can’t be achieved, the dev team will use Mainnet. Every test on mainnet will be rigorously documented.

In case the proposal fails, the above options will be followed.

5. Proposal execution

As ETH from the IDO is actually in the form of nWETH, which is not supported now, this 5 nWETH would first be sent to an existing nWETH NEAR account and then second, be sent through the Rainbow Bridge.

The ETH account would be in the hands of the dev team. The address will be public (available to the community) for transparency and monitoring purposes. Each event will be recorded in a public DEV-ETH-USE REPORT doc, updated on a monthly basis.

4 Likes
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Thanks for putting together this proposal Didier!

Market research and thorough testing are fundamental to staying current and competitive.

A couple of things that would be worth noting for the records:

  • The original proposal was for 20 ETH and was submitted to AstroDAO prior to the governance forum post.
  • The original proposal currently has 9 votes in favour, three against and should be allowed to time-out in 3 days and 7 hours (as of the time of this post).
  • Should the original proposal be voted through (for whatever reason), it is understood it is for the same purposes as this current proposal.
  • In the future we will strive to have the governance forum posts up first to ensure we are all on the same page as to what it is we are voting on.

I support this proposal going through as long as:

  • We include weekly updates on how the testing is going during our community calls.
  • There are monthly (or whatever timeframe the teams considers to be appropriate) with more detailed reporting (including how much money was burnt in gas, remaining funds in use, etc.)

It would also be good to have an established process for:

  • Profits: should funds be deployed in a yield generating platform, how are those assets accounted for?
  • Remainder: once all testing has even concluded, what happens to the remaining funds (whatever is nor burned in fees).

I would expect the answer to both of the above to be that the funds are then returned to the DAO treasury.

Keep up the good work,

AVB

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Yes, that is correct.

Agree, let’s make sure we are aligned with the process for future proposals.

I believe that those yields should be accounted in Ref PnL and Revenue statements. We should track the NAV (Net Asset Value) of the corresponding testing address(es).

Then I believe that the funds should be returned to the DAO, if there is no further testing needed / planned.