On April 4th, PrimeDAO joined forces with Celo to accelerate the development of DAOs building at the nexus of web3 and climate action. As strategic partners with a common mission, PrimeDAO and Celo have launched multiple initiatives to support regenerative finance projects on the Celo network.

As part of the partnership, PrimeDAO and Symmetric, have successfully integrated Balancer v2 liquidity pools into Celo, enabling the launch of ReFi DAOs in the network through Prime Launch.

We are excited to announce that this major partnership milestone has been achieved. The Prime Launch dApp now supports the Celo Network, allowing projects to have a web3 on-chain token sale without having to write a single line of code.

The platform offers two distinct launch options for projects to raise funds: Seed Launch, which enables fixed price swapping and customization of contributor classes with unique parameters, and Liquid Launch, a fair and efficient method for launching and generating initial liquidity for a token.

Growth Program and Commit to Purchase

PrimeDAO not only manages the launch platform on Celo but also runs an incubation and mentorship program to support initiatives that combine web3 and climate. Through this program, early-stage projects can gain access to experienced mentors and service providers to aid in the development of their projects.

Additionally, ReFi projects launching on Celo can take advantage of PrimeDAO’s commitment to purchase program, which provides up to 100k cUSD to eligible projects based on a team-developed methodology. Interested ReFi projects can apply for the ReFi Launch program on Celo here!

Kolektivo’s Seed Launch on Celo

Kolektivo successfully hosted the first ReFi Prime Launch on the Celo Network from December 8th to December 15th.

During this time, more than 100k cUSD was raised for Kolektivo’s seed offering with the aKNT token, which represents a claim to at least one Kolektivo Network Token (KNT) upon the network’s launch in 2023.

Want to Launch on Celo with Prime Launch?

The web3 community is rapidly responding to the climate emergency through the growing Regenerative Finance (#ReFi) movement. At PrimeDAO, we are ready to do our part. 💪

Our goal is to accelerate the #ReFi movement by onboarding the next thousand DAOs that are working towards regenerating the environment and building a future of financial inclusion.

We are providing support to those interested in launching on Celo through our Prime Launch program, including access to our liquidity boost program.

To apply, visit: primedao.typeform.com/to/AJWiFusP

🕸 Site | 💬 Discord | 💭 Telegram | 🐤 Twitter | 📨 Newsletter

Prime Launch Now Supports the Celo Network was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

Useful links:

• Developer Docs
• Protocol Wiki (Silopedia)
• Silo Lightpaper
• Silo Interest Rate Model paper
• Formal Verification of Silo V1 (Certora)
• ABDK audit report (Silo core contracts — 6 Major, 1 Moderate, and 65 Minor issues)
• Quantstamp audit report (Silo core contracts — 14 issues- 0 high,5 medium, 3 low, and 6 info risks)
• Silo Governance Forum
• Oracle — price providers (Chainlink as default price provider, UniswapV3 TWAP and BalancerV2 TWAP)
• Timelock Controller
• Vesting Contracts (Contributors, Advisors, and Investors)
• GitHub
• File list of 57 New Silos for deploying — for community review
• LinkedIn
• Twitter
• Coingecko

Abstract

Silo is a permissionless and non-custodial lending protocol that allows the borrowing of any asset using any other asset as collateral. This is enabled through the creation of isolated (siloed) lending markets whereby a pool consists of only three assets: The unique token plus ETH and XAI. Both ETH and the new stablecoin XAI function as bridge assets to connect the different silos.

A quick TL;DR of our findings:

• Silo Finance introduces a new money market design with isolated markets (silos) for every unique token. These isolated markets are paired with the same counterpart asset called a bridge asset (ETH or XAI). Bridge assets represent concentrated liquidity bridged across all isolated markets, which facilitates the onboarding of any token, especially long-tail assets. The isolation of high-risk assets greatly reduces protocol systemic risk, while bridge assets prevent fractured liquidity and keep the protocol liquid and fluid.
• Silo allows permissionless listing and parameter customization for each silo through governance. Every newly created silo needs to have a reliable price feed source and starts with default collateral factors for Loan-to-Value (LTV), Liquidation Threshold, and Liquidation Penalty.
• The core smart contracts were fully audited by Quantstamp and ABDK and tested by the core team through a formal verification process using Certora Prover.
• Silo recently introduced a new stablecoin named XAI, which will serve as the second bridge asset alongside ETH. XAI can be minted and burnt by the SiloDAO via governance (using Tally).
• Silo has notably high levels of governance decentralization compared to most early-stage protocols. All core protocol functions are managed by SILO token holders via on-chain governance.

Silo Finance — An Introduction

Siloed Lending Markets

Silo is a permissionless and non-custodial lending protocol that allows the creation of isolated (siloed) lending markets. The protocol is designed to support two types of asset categories, Unique Tokens and Bridge Assets. Unique tokens have their liquidity isolated in dedicated silos (1 silo for each token), while the bridge assets (currently ETH and XAI) are paired with every unique token across all isolated silos.

Inside an isolated market, the three assets can be used interchangeably as collateral and loan. In other words, when lending token A, one can only borrow the bridge assets against it (ETH, XAI, or both). The bridge assets can then be used as collateral in another silo, to borrow token B. Thus, one can borrow any token with any collateral, while isolating the risks related to the collateral token within one pool.

In comparison, 1st generation lending markets like Compound or Aave have all collateral in one pool (shared pool), hence the impact of exploits — e.g. through price manipulation — can be much higher. This weakness was exploited by hackers multiple times, the lending platform Cream serves as an unholy example. Other drawbacks of the original shared-pool design include limitations in listing new assets, high parameter maintenance cost, cumbersome collateral listing process, and low capital efficiency. Silo aims to improve these systemic risks and drawbacks and unlock long-tail assets to be lent and borrowed.

Another distinguishing factor is the permissionless listing of new collateral. According to the Silo docs (here and here), anyone can propose the addition of new asset silos to the protocol, as long as a price feed (oracle) exists. Currently, the core team offers to configure and create the on-chain votes to deploy new silos. However, there is a guide describing the process, so anyone with the right technical skills can deploy a new silo for a vote.

Shares Tokens (sTokens)

sTokens are ERC-20 tokens that represent a claim on the deposited asset. For instance, in return for depositing LINK into Silo, the lender receives sLINK. sTokens also accrue interest, depending on the interest rate per token.

When depositing tokens, Silo provides an innovative feature that allows lenders to choose whether their deposits can be borrowed by others, or whether they want to “protect” their deposits, which disables others from borrowing said assets. However, in return for protecting the token, the lender forgoes earning an interest rate. sTokens represent borrowable assets, and spTokens represent protected deposits. It’s also possible to do both for the same asset (e.g. 40% of the token is borrowable and 60% is protected). spTokens can still be used as collateral to borrow other tokens.

For bridge assets (ETH or XAI), the naming convention is slightly different, i.e._ sBridge-ABC_, whereby ABC represents the name of the silo that ETH or XAI is deposited into. For instance, when depositing the bridge asset ETH into the LINK silo, the lender in return receives sETH-LINK or spETH-LINK.

Debt Tokens (dTokens)

Conversely, dTokens are ERC-20 tokens representing a borrowed asset. They are minted when an asset is borrowed and burned when the loan is paid back. Unlike sTokens, dTokens cannot be transferred out of a wallet. For bridge assets, the borrowed token is represented again as dBridge-ABC (e.g. dETH-UNI).

Summary

In summary, Silo introduces a few innovations and a new money market primitive aiming to make lending markets less risky, while simultaneously improving market access for long-tail assets. The ability to protect tokens from borrowers can be a very interesting feature for other DAOs to deploy their tokens and borrow tokens against them.

The risk reduction, however, has one trade-off with the current design, which is borrowing at Silo can initially result in up to six transactions. A typical transaction sequence might be:

• allow deposit of collateral (only required the first time)
• deposit collateral
• borrow the bridge asset
• allow deposit of the bridged asset (only required the first time)
• deposit bridged asset
• borrow target asset

Reversing it will incur another four transactions. The image below displays an example of the Silo dashboard for depositing APE, borrowing ETH, then depositing ETH to borrow CVX.

This splits the risk for the user into two. For instance, if CVX moons to the point that the user might get liquidated, the originally deposited APE is still safe. On the other hand, this can be rather costly, especially on the Ethereum mainnet, and might be a blocker for smaller accounts to use Silo as intended. When talking to the team they revealed that they are working on a swap-like feature to improve this. And the long-term vision is to enable a unified health-factor, that will allow all isolated positions to be unified and managed as one, but this will take time to build. The introduction of XAI as a bridge asset might improve this too, as most users are typically looking to borrow stable assets. They can now do that where XAI is enabled as a bridge asset, but more on that in the next section.

The XAI Stablecoin

The Silo team has issued a new over-collateralized stablecoin with a soft peg to the US Dollar called XAI. The main use case for XAI is to serve as a second bridge token alongside ETH. Thus, enabling users to borrow XAI to bridge from token A to token B.

SiloDAO is the only entity that controls XAI. The DAO can choose to mint unlimited XAI and deposit it into any number of silos via executive proposals. The DAO can also burn XAI that is extended to any silos via governance proposals. Hence, when minting XAI into a silo, the SiloDAO effectively determines XAI’s backing, which can also be reversed by burning XAI from a silo. In the beginning, Silo will only enable XAI as a bridge asset for USDC and ETH. This strongly reduces the collateral risk of XAI.

Minting XAI

XAI is an ERC-20 token contract owned by the Silo Timelock Controller contract.

The Timelock Controller is controlled by SiloDAO (i.e. SILO token holders voting via Tally), who control the XAI in circulation through the mint and burn function. Timelock duration is two days (after a voting period of three days).

To create XAI, Silo used a set of standard smart contracts provided by OpenZeppelin (they used OZ standards for all their contracts).

Essentially, XAI works quite similarly to other decentralized stablecoins such as DAI or FRAX, which are CDPs (Collateralized Debt Positions), whereby a user mints new stablecoins when depositing collateral. As mentioned above, XAI can only be minted by the DAO. Once in a silo, XAI becomes a CDP as users can deposit collateral and borrow XAI in return (starting at an interest rate of 0.1%). This is a new method of creating stablecoins but is quite similar to MakerDAO’s debt ceiling, whereby MKR holders decide how much DAI can be minted per collateral vault. This design helps to control risk exposure to certain collateral types.

Silo Components

Silo Protocol smart contracts have a modular design and the protocol consists of multiple components that are not upgradeable, but replaceable. Only the SiloRepository component is not upgradeable nor replaceable. Components (registries) and description of each:

• SiloRepository handles the creation and configuration of silos and stores the configuration of every asset in each silo. All assets have the same default configuration that later can be customized by the contract owner. As mentioned above, the SiloRepository contract is immutable:

• Silo is the main component of the protocol that acts as a vault for assets, implementing the lending logic, managing and isolating the risk, and performing liquidations.
• PriceProviderRepository manages the oracle modules and the price request routing for each silo. It can support many protocols and sources. Currently, it supports three oracle sources: Chainlink (default price provider), UniswapV3 TWAP, and BalancerV2 TWAP.
• Interest Rate Model Silo Finance uses a dynamic interest rates model which is described in more detail in this Interest Rate Model paper.
• Silo Router is a utility contract that can batch any number or combination of actions (Deposit, Withdraw, Borrow, Repay) and execute in a single transaction.
• The permission system registry consists of three smart contracts: GuardedLaunch.sol, TwoStepOwnable.sol, and Manageable.sol

Silo Governance

The governance process follows a standard procedure of forum discussion, Snapshot vote, and finally on-chain vote. For more details visit the docs. In practice, however, Snapshot is mostly applied for decisions concerning expenditures of the DAO’s funds, whereas changes that affect the protocol itself are directly voted on via an on-chain proposal on Tally. The developer fund is controlled by a 2-of-3 multi-sig (owners: signer1, signer2, signer3). The owners are internally doxxed. The screenshot below displays all governance parameters.

Notably, the voting period for proposals is three days. Plus a voting delay of two days for on-chain proposals. This is in line with best practices and seems to be a reasonable time frame. A quorum of 10M equals 5% of tokens in circulation (~180M SILO) or 1% of the max token supply (1B SILO). There is currently no emergency function or admin with the power to veto in case of an attack or issue. The only thing that is required to participate in on-chain governance is to delegate SILO tokens to one’s wallet or to a delegate. There is currently no vote-lock or staking solution in place. However, governance attacks via flash loans are prevented through the delegation mechanism, as new delegates cannot participate in votes that are already live at the time the delegate function is called. Moreover, the team expressed the intention to move to a vote-escrowed tokenomics system a while ago, however, the last update was from April 2022.

Risk Vectors

Some of the risks are highlighted below.

Custody Risk

There is no direct custody risk because SiloDAO as the owner of the core contracts doesn’t have the privileges to access any funds. However, two privileges can impact user funds in some ways:

• setFees — The SiloDAO (as onlyOwner) can decide to set and adjust certain fees, such as borrow-entry-fees, protocol-share-fees, and liquidation-fees. These fees can affect borrowers and users when getting liquidated. Currently, those fees are not activated and are set to 0.

• setPriceProvidersRepository — The chosen oracle solution can also affect users’ deposits. The DAO must ensure that to select the best oracle options for each silo.

GuardedLaunch.sol — a contract that is part of Silo’s permission system — enables the SiloDAO (as Timelock Controller) to implement security and risk-averse functions. For instance, it allows the contract manager (onlyManager) to pause specific silos in case of an exploit. If that happens, users deposited in the paused silos are at risk of liquidation, if their collateral value decreases below the liquidation threshold, after a new start (remove pause).

Governance Risk

As mentioned above, all changes that affect the Silo protocol and its parameters are implemented via an on-chain governance vote. These changes can include:

• Deployment of new markets (silos)
• Setting/adjusting silo parameters (LTV, LT, interest model, price feed)
• Minting/redeeming XAI
• Turning on/off fees
• Deploying new bridge assets
• and even increasing the supply of SILO tokens

In summary, governance has extensive and very far-reaching powers over Silo. Hence, the question arises “how likely is it that a malicious party can obtain a majority voting influence to instigate harmful changes to the protocol” (e.g. mint infinite XAI)?

For this to happen, the party would need to accrue a substantial amount of SILO tokens (or get voting power delegated). Presuming that the core team and SILO investors only vote in the best interest of the DAO, the answer is: The chances of success are rather low since the team has quite a strong token position (see chart below). However, in case a malicious governance proposal should pass successfully, the only recourse to users is the two-day timelock. There is currently no privileged actor that can veto a malicious proposal. The chart below shows the voting power of all delegators. It’s important to note that to participate in on-chain voting, one has to delegate SILO to one’s wallet or to another delegate.

As seen in the chart, the top three delegates control 51.2% of the overall voting power that is currently eligible to vote. This is quite a high concentration of power (basically a Nakamoto coefficient of 3). With a bit of forensics on etherscan, using the vested token overview, it becomes clear that the address with the most delegated voting power is controlled by the founding team. The same is true for ranks 4 (6.3%), 7 (4.6%), and 10 (2.9%), adding up to at least 40% of the voting power that is currently controlled by the core team. The second and third largest delegates seem to be whales and the rest are investors and community members.

This does not come as a surprise, given that the founding team will receive 27% of all tokens in circulation (vested over 3 years) according to the vesting schedule [side note: the team allocation as stated in their docs is only 21.75%, that’s 5.25% lower than the actual allocation. Those 52.5M tokens are currently sitting in a vesting contract untouched].

In summary, the team has by far the largest allocation. All other stakeholder groups don’t even come close, even all investors combined only achieve 6.3% voting power. Two whales currently also hold significant voting power, however, it still leads to the conclusion that SiloDAO is highly influenced by the core team. There are plans to dilute the team share via a veSILO tokenomics issuance scheme, however, until this becomes a reality there is a large trust factor put onto the Silo core team — who is partially doxxed. In addition, they managed to attract well-known investors and advisors, which adds to the credibility of the team.

Smart Contract Risk

Useful links:

• Formal Verification of Silo V1 (Certora)
• ABDK audit report
• Quantstamp audit report

Silo has undergone two audits by ABDK and Quantstamp, and has tested the smart contracts against formal verification rules with Certora. This process revealed a few critical vulnerabilities that the team was able to resolve. There is also a $100k bug bounty program live on Immunefi. Overall Silo is taking security seriously and has taken the necessary measures to circumvent vulnerabilities. However, both audits were limited to Silo’s lending platform before XAI was introduced. It can be argued that XAI is a standard mint/burn contract controlled by the DAO that doesn’t need an audit, however, it must be highlighted nonetheless as a potential risk.

Depeg Risk

XAI is a new stablecoin. There is no historic data about its price stability or behavior during highly volatile market conditions. We can, however, presume that Silo has and will implement all the right measures to ensure XAI’s stability.

As with other stablecoins, keeping the peg depends on a few key factors:

1. The underlying collateral needs to be fit for purpose (i.e. highly volatile collateral increases the risk of default and the risk of liquidations)
2. For the market to absorb liquidations, as well as arbitrage to keep the peg, both the stablecoin and the collateral asset need to have deep enough liquidity
3. The protocol can support price stability via parameter adjustments
4. Ideally, the protocol has some fallback solution in case of a black swan event

We’ll discuss the collateral risk (1) in more detail in the next section. The other stabilization mechanisms highlighted above are mostly covered:

• XAI is an over-collateralized stablecoin. At first only USDC and ETH will serve as collateral for XAI. As the usage of XAI expands to other pools, this will change and XAI can be backed by more volatile assets too
• Arbitrage possibilities are given and liquidity in the open market will be seeded by the DAO and incentivized through CVX gauges (see proposal)
• The DAO influences XAI via parameter adjustments, such as borrow rate, adding/removing collateral, increasing/decreasing XAI availability

The only measure that is missing is a concrete fallback solution, that the DAO can execute in case things go south (e.g. use SILO as a backup to stabilize the stablecoin). However, this can also come at a later stage, once XAI has achieved some product market fit.

The last thing to highlight related to stability is that Silo’s TVL is currently around ~$2.6M. However, most of that TVL was seeded by the DAO itself. There needs to be significant growth in TVL to enable sufficient backing of a stablecoin that aims to facilitate bridging between 60+ assets (10 assets are already live and 57 assets will be added soon). While there are plans to incentivize liquidity for XAI, there is currently no plan presented that defines anything specific about how the DAO plans to attract more TVL for its long-tail asset silos (a potential veTokenomics discussion seems to be stuck).

Collateral Risk

In the beginning, the only collateral enabled to borrow XAI will be USDC and ETH. Thus, eliminating other risks that come with long tail assets (e.g., low asset liquidity, high price volatility, depeg of the collateral, etc.).

Both ETH and USDC are quality assets with more than enough liquidity to offset potential liquidations. Even when XAI will be enabled as a bridge asset for more silos, the collateral risk is limited only to those isolated markets.

We currently don’t see any risks related to collateral, however, anyone can propose to add new credit lines. Credit lines describe the process of allowing silos to use XAI as a bridge asset. While new credit lines need to be approved by governance first, this process can change the composition of XAI’s backing. Potential risks occur in cases where XAI supports illiquid and highly volatile assets. Hence, we recommend that each credit line and silo addition be carefully considered. Silo should also think about installing or incentivizing more detailed risk assessments for each collateral. A bad debt dashboard (as provided by RiskDAO for instance), is another option to better inform users about the health of individual silos.

XAI as Collateral Risk

Silo also aims to enable XAI as collateral within the protocol. As highlighted above, for XAI to become a low-risk collateral, there needs to be enough liquidity in the open market. This will help to facilitate potential liquidations and arbitrage, which is needed to support XAi’s stability.

The team is working on two initiatives that will ensure the initial provisions of adequate liquidity. First, seeding the initial USDC silo with $1.875M USDC to mint $1.5M XAI. Deposit the minted $1.5M XAI plus an additional $1.5M USDC into a Uniswap V3 pool. The Uni pool is only temporary to ensure smooth liquidations. Once Silo’s own liquidation engine is able to support Curve pools, they will migrate liquidity to the XAI/FRAXBP pool. However, this might take a few weeks to finalize. And secondly, Silo will use 130k of their own vlCVX to vote for incentivization of their pool. Hence, we believe there will be enough liquidity for the early stage of XAI.

Discussion and Conclusion

1. Is it possible for a single entity to rug its users?

No, SiloDAO does not have access to user funds and cannot touch users’ collateral. It can, however, mint XAI to silos or redeem the minted XAI that is not borrowed. The DAO also controls the interest rates, LTV, and other parameters of XAI. Thus, playing a vital role in ensuring the price stability of XAI. It’s also worth reiterating that the core team has a strong influence over the DAO, given their large token allocation.

2. If the team vanishes, can the project continue?

Yes, Silo is managed via governance votes. Even if the team would disappear to the Bahamas, anyone with SILO tokens could still operate the protocol (i.e. adding/removing silos, minting/redeeming XAI, changing parameters, etc.).

The developer fund on the other hand — which contains most of the DAO’s funds — would probably not be accessible any longer, as it’s controlled by a 2-of-3 multisig belonging to the team.

3. Do audits reveal any concerning signs?

Yes, but the team was able to remove them. The issues were discovered in a formal verification process with Certora Proven, the team discovered 2 high and 3 medium severity issues The audit report of ABDK found 6 major, 1 moderate, and 65 minor issues, and the Quantstamp audit report recorded 14 issues: 0 high, 5 medium, 3 low and 6 info risks. Again all issues were resolved.

Summary

• Silo Finance has introduced some innovative new primitives that are mostly targeted toward the more risk-aware DeFi users. In general, we gained the impression that Silo is very focused on reducing risks and increasing security where possible.
• Silo is still in an early stage, the beta version of its siloed lending market only went live at the end of August 2022. And the stablecoin XAI is just about to be created as we write this report. Even though adoption is still low, Silo has a promising use case and a great setup to be successful. Another promising sign is that Silo has already implemented on-chain governance. Thus, SILO voters are already in control. Even though voting power is rather centralized around the team, it is great to see a protocol implementing decentralized governance early on.
• Although the basics look promising, Silo still has to prove its use cases and grow significantly to achieve its goals. As of today, the lending platform has very little organic TVL or borrowing volume.
• As already mentioned, we did not find any concerning signs related to Silo’s security or anything that’d indicate the potential for a rug pull. The team is partially doxxed and they managed to bring on board some well-known advisors and investors, adding to Silo’s credibility. One factor that would increase Silo’s credibility further, however, is a more decentralized distribution of governance influence.

Disclaimer and Disclosure

This article does not constitute any sort of financial, legal, or other kind of investment advice. It is purely for educational purposes. The article was first published on Curve’s risk team substack and later posted in Prime Rating’s blog. It was written as a collaborative effort between the two communities. This risk assessment was commissioned by the Curve veFunder and both authors (dabar90 & Lavi) claimed their bounty of 500 CRV each. In addition, both authors received a kind tip in SILO tokens from veFunder and Silo Finance after completion of the report. The report was reviewed by members of the Curve risk team. For full financial disclosure read their article here.

Sources

• Developer Docs
• Protocol Wiki (Silopedia)
• Silo Lightpaper
• Silo Interest Rate Model paper
• Formal Verification of Silo V1 (Certora)
• ABDK audit report (Silo core contracts — 6 Major, 1 Moderate, and 65 Minor issues)
• Quantstamp audit report (Silo core contracts — 14 issues- 0 high,5 medium, 3 low, and 6 info risks)
• Silo Governance Forum
• Oracle — price providers (Chainlink as default price provider, UniswapV3 TWAP and BalancerV2 TWAP)
• Timelock Controller
• Development Fund Multisig (2-out-of-3)
• Multisig owners — Signer1, Signer2, Signer3
• Vesting Contracts (Contributors, Advisors, and Investors)
• GitHub
• File list of 57 New Silos for deploying — for community review
• LinkedIn
• Twitter
• Coingecko

Asset Risk Assessment: Silo Finance was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

ReFi Launch program ft Celo

As strategic partners with a shared mission, PrimeDAO and Celo run multiple programs to support Regenerative Finance projects on Celo.

As of last week, the Prime Launch dApp supports the Celo Network, allowing projects to host an effective Web 3.0 native launch without having to write a single line of code.

The Launch platform supports two different types of launches: Seed Launch, a fixed price swap with the ability to create custom classes of contributors with their own parameters, and Liquid Launch, a fair and efficient method to launch and create liquidity for a token on Celo in collaboration with Symmetric.

More details about the different types of launches and the benefits of each method can be found in the Prime Docs.

Incubation, Mentorship and Commit to Purchase

In addition to operating the launch platform on Celo, PrimeDAO’s team also runs an incubation and mentorship program to accelerate initiatives building at the nexus of web3 and climate. Through this program, early-stage projects can access a network of experienced mentors and service providers to help develop their projects.

ReFi projects launching on Celo can also benefit from a commit to purchase program operated by PrimeDAO. Depending on the quality and conviction of a project, based on a methodology developed by the team, PrimeDAO can contribute up to 100,000 cUSD to a project’s launch.

ReFi projects that are interested in participating in the ReFi Launch program on Celo can pre-register here!

Prime Launch to support the Kolektivo Seed on Celo

Kolektivo will host the first ReFi Prime Launch on the Celo Network from Thursday, December 8th to Thursday, December 15th.

During this period, up to 200,000 cUSD can be contributed to the Kolektivo Seed to receive aKNT, a token representing a claim to at least 1 Kolektivo Network Token (KNT) when the network launches in 2023. To participate, contributors need to register with Kolektivo via this form.

The KNT token is the native token of the Kolektivo Network. It has essential functions in the network, such as managing the Network Treasury and Ecological Assets controlled by Kolektivo, directing the project roadmap, and as a collateral token for the treasury and reserves.

Contributors will receive 1 aKNT per 0.15 cUSD contributed. The aKNT will be locked in Prime Launch for up to 1-year to ensure the correct contributors receive their KNT when the Kolektivo Network launches. There is no minimum to the amount an individual can contribute.

Interested and want to dive deeper into Kolektivo? Start by exploring their Medium blogs or read the Bluepaper to get a complete overview.

About Kolektivo

Kolektivo is building a toolkit for real-world regenerative economies that leverage the latest Web 3.0 innovations. The Kolektivo tools will allow local communities to coordinate their efforts to tap into the emerging Natural Asset market and provides them with the framework to manage and govern their community currency to enhance further their ability to coordinate development.

The project has received grants from DAOstack (to create CuraDAO in 2019), MakerDAO (to create CuraDAI in 2020), Fuse, Celo, Climate Collective, and the Ministry of Economic Development of Curaçao.

The MVP of the toolkit went live in October this year during the Kolektivo Festival, a big ReFi event on the Caribbean island of Curaçao with over 750 attendees.

Now, Kolektivo is gathering resources to complete the first version of the toolkit and expand beyond the initial pilot in Curaçao, together with its partners.

How to Participate

If you want to support Kolektivo’s mission to create a network of local regenerative economies, follow the steps below:

1. Fill out the pre-registration form to receive all relevant information and next steps

2. Based on your preferred contribution limit, you’ll have to follow potential KYC steps.

3. Once approved, visit the Prime Launch app between December 8th and December 15th and follow the steps in the app to contribute.

If you have any questions or need support — you can join the PrimeDAO Discord or reach out to the Kolektivo team via seed@regenerative.fi.

Benefit of using Prime Launch Seed

Using Prime Launch, projects like Kolektivo can make a portion of their Private Round available to the larger ReFi community in a streamlined way while simultaneously connect with the PrimeDAO network of mentors, service providers and DAOs.

Accelerate ReFi with PrimeDAO

If you are a ReFi project interested in launching on Celo, read more about our Growth Program here and reach out to us here, or jump into Prime Launch and start exploring.

If you are committed to enabling DAO 2 DAO innovation and are interested in collaborating with or getting involved in Prime, jump into our Discord now, and let’s get connected!

Prime Launch to support the Kolektivo Seed on Celo was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

Aqualis’ initial token sale to the community with Prime Launch has been completed on Nov 21, 2022.

Aqualis is a DeFi protocol with a suite of features that aims to maximize efficiency through a unique asset multi-utilization algorithm.

The seed launch that took place on Prime Launch started on the 15th of November 10:00am GMT and ended on the 21st of November 10am GMT — lasting a total of 6 days with a total raise of 18,205.79 USD by the allowlisted participants.

We asked Aqualis their reason to use Prime Launch…

“The Prime Launch platform, their team, and tools developed by PrimeDAO have allowed our team to effectively launch the AqualisDAO project token.

The Prime Launch support team and platform have provided Aqualis with a ready-to-go decentralized launch infrastructure, smooth UX, low initial cost/capital requirements, and unparalleled customer support “

The Reason for the Seed Launch

Since the launch of Aqualis in March 2022, the founders fully funded the project’s development. Since then, Aqualis has created a website and frontend for the app, a working AMM and staking module, governance, and an early community and now working on the lending smart contract.

Due to this, the Aqualis team is now more confident than ever about the protocol, thus choosing to launch now. The funds will be used primarily for auditing and marketing once the protocol goes live.

Future Plans of Aqualis

Aqualis plans to go live and launch the public sale in early Q1 2023. Aqualis will maintain and optimize parameters in the existing ecosystem while adding new features to enhance capital efficiency during the next phase of development, before expanding into other sectors of DeFi such as cross-chain integration, NFT integration and GameFi. Please note future features and plans are subject to change.

Further information can be found on their roadmap here.

On Aqualis

The Aqualis DAO is a DeFi protocol with a suite of features that aims to maximize efficiency through our unique asset multi-utilization algorithm.

By dynamically allocating funds throughout the ecosystem, Aqualis can achieve maximum capital utilization and efficiency. This allows Aqualis to offer the lowest fees in DeFi while retaining high depositor rewards without utilizing an inflationary token design.

A diverse team of DOXed experienced industry professionals, entrepreneurs and innovators. For more information, visit our teams page: https://docs.aqualis.io/aqualis-io/meet-the-team

On PrimeDAO

PrimeDAO focuses on researching and developing next-generation coordination tools and solutions for decentralized organizations. PrimeDAO is committed to enabling DAO2DAO innovation through its tools, which can help any DAO launch a token, make a deal, form a joint liquidity pool or venture, and inform DeFi participants on what they’re doing and how they’re doing it.

Get Primed!

We’ve never been more confident that DAO2DAO interactions will drive the future of crypto networks — we think the best way to bring this future into being is to build it.

If that interests you, there’s never been a more exciting point to get involved in Prime and reshape DAO coordination.

If you are a member of a DAO looking to join the networked DAO ecosystem by executing an on-chain agreement with Prime Deals, reach out to us here, or just jump into Prime Deals yourself and start exploring.

If you are committed to enabling DAO 2 DAO innovation and are interested in collaborating with or getting involved in Prime, jump into our Discord now, and let’s get connected!

Aqualis Seed Launch on Prime Launch was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

On October 31st, 2022, Aragon and PrimeDAO completed a strategic partnership and token swap totaling $100,000 in $ANT and $D2D. This deal further aligns the parties’ interests ahead of the launch of the new Aragon app and OS in early 2023.

Product and Organization Synergy
Aragon and PrimeDAO have a shared vision of creating a DAO framework and building tools to streamline the creation and development of DAOs. Over 5,000 DAOs have been created using the aragonOS, including Lido, Decentraland, BrightID, and API3. The upcoming App and OS are more modular, making it easier for DAOs of all types and sizes to run governance on-chain. The Launch and Deals tools developed by PrimeDAO allow DAOs to effectively launch their project token and engage in DAO 2 DAO token swaps. Together, these technologies allow a DAO to go from idea to maturity.

Token Swap Details
The Token swap was executed via the Prime Deals dApp after receiving unanimous support from Aragon Governance on October 17th and PrimeDAO Governance on October 14th.

• A total of 29,661.00 ANT and 890,217 D2D have been swapped for a total valuation based on the 7-day TWAP taken on October 10th, 2022, of $100,000
• Both DAOs have committed to holding the tokens for at least 6 months
• Full voting power will be effective from the moment of swapping to promote cross-DAO governance

Benefits to Aragon DAOs
This partnership opens up additional support and resources for Aragon DAOs that are interested in launching a token or engaging in a token swap with other DAOs. A detailed product usage guide will be created, and product workshops will be hosted. If you’re part of an Aragon DAO and want to learn more about the Prime tools, don’t hesitate to reach out!

“Aragon has always been a trailblazer in the DAO space, and the new product looks extremely promising. Both organizations share the same values, and our tools are highly synergistic. Hopefully, this partnership is the start of a long-lasting collaboration between the two DAOs.” — Luuk Weber, Strategic Lead of PrimeDAO

“PrimeDAO is a strong team of DAO veterans from across the ecosystem that has built some remarkable coordination tools for solving real DAO problems. Working with Prime is an important step to bring these functionalities to organizations leveraging Aragon infrastructure. The swap is hopefully the first step to align incentives across our projects and spur deeper collaboration.” — Ivan Fartunov, Head of Ecosystem at Aragon

Get Primed!

We’re confident that DAO2DAO interactions will drive the future of crypto networks — we think the best way to bring this future into being is to build it.

If that interests you, there’s never been a more exciting point to get involved in Prime and reshape DAO coordination.

If you are committed to enabling DAO 2 DAO innovation and are interested in collaborating with or getting involved in Prime, jump into our Discord now, and let’s get connected!

🕸 Site | 💬 Discord | 💭 Telegram | 🐤 Twitter | 📨 Newsletter

Aragon and PrimeDAO establish Strategic Partnership ⚡ was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

Building something from scratch has long been a challenging and difficult experience.

When one enters into the path of poiesis, or creation, the nature of the process requires great attention, due diligence, planning, and execution capabilities — which are difficult to achieve. A sad but true fact is that; about 90% of startups fail. 10% of startups fail within the first year. Across all industries, startup failure rates seem to be close to the same. One of the most important steps toward achieving success is building the right task force with members that complement each other. It’s important to create an effective and efficient building environment derived from the unique complementary capabilities of its task force.

Internal teams play an important role when building products/projects from scratch. The synergy between the team members, the ability to help them focus on their strengths, and a good communication flow are some of the most important factors that lead a team to success.

However, sometimes circumstances and situations may arise where the core team’s know-how and creativity are not sufficient to take the project to its desired outcome. In these circumstances, projects that end up being successful, embrace the virtue of accepting that sometimes one’s own capabilities are not enough to accomplish an objective, and they pursue guidance from outside sources. Human nature makes it difficult to accept one’s own shortcomings, but once that ego-centric barrier has been overcome, one becomes open to the different perspectives and guidance needed in order to find the missing pieces of the puzzle.

Getting guidance or mentorship from others not only creates room for fresh points of view to enter the equation but also enables the parties to join forces and complement each other in ways they didn’t know they needed. It enables a healthy exchange environment where the mentors willingly share their take on a certain topic based on their lifetime of experiences and values. And since they are not directly involved in the project itself, they can offer guidance in a much more objective way, free from any biased opinion. Mentors can see the project from the point of view of the end user more clearly since they don’t get vulnerable upon receiving criticism. Internal teams, as well as the project owners, might not want to accept failure at a glance due to all the hard work they put in; however, a mentor can tell the blunt truth without hesitation.

And sometimes this is all one needs in order to change course.

Let’s look at some of the historical examples of mentorship:

Socrates mentoring Plato — Plato mentoring Aristotle

This trio of relationships shaped human history. Socrates, Plato, Aristotle and Alexander all understood the power of giving and receiving guidance. The knowledge transfer channels and discourse were so open amongst these four students of life that they all went on to form legacies of their own.

Socrates mentored Plato. Plato spread Socrates’ teachings and philosophy as far and wide as he could. Plato mentored Aristotle in philosophy and, in the Macedonian village of Mieza, Aristotle mentored Alexander the Great. The teachings spanning back to Socrates had trickled through great minds through mentorship down to Alexander. This chain of leaders sparked by Socrates demonstrates the importance of passing on knowledge and keeping the tradition of mentoring alive.

Freddie Laker mentoring Richard Branson

Branson once said, ‘If you ask any successful business person, they will always have had a great mentor at some point along the road.’ — And he was right! Branson went to Laker during his struggles to get Virgin Atlantic up and running. ‘It’s always good to have a helping hand at the start. I wouldn’t have got anywhere in the airline industry without the mentorship of Sir Freddie Laker.’

Professor Dumbledore mentoring Harry Potter

Although completely fictional, we couldn’t not add it in! The relationship between the two of them is strong. There is respect for Dumbledore, which is shared amongst all students, all understanding how much there is to learn. Harry’s development can be attributed to Dumbledore, far more than magic. Ta da!

As seen from the examples; since mankind has walked on the earth there have been mentors. Without mentors, we would have to learn everything from scratch every time we started something new. Having someone to glean years of hard-won information in a matter of days is invaluable.

When it comes to building and learning in web3, things get even more challenging due to the evolving and raw nature of the ecosystem.

Even though there are lots of successful examples in the web3 space there isn’t a standard formula that leads to success — just like in any other successful example. Lots of methods are being experimented and new tactics that work are being discovered every day (even every hour). It’s fast-paced, community-oriented, receptive, and dynamic. And all these elements make it even more difficult for projects to build and grow in the web3 space without a proper roadmap, a good squad, and an effective execution plan. One must be open to trying out new methods and experimenting together with the rest of the space to build a better future.

While doing so; one thing that would have immense benefits to the projects is undoubtedly having good mentors (or even a single good one). Successful mentors in the web3 space know how to turn theories into reality and hold significant information with themselves ready to be shared with others. They have already gone through the process of planning, executing, growing, and succeeding in web3 and therefore carry an incredible amount of know-how… None of the mentors would claim that they know everything about web3; however, they would definitely know how to steer the project in the right direction when builders come to them for guidance.

During the founding days of PrimeDAO, many mentors have guided its founders and stewards in different areas. Patrick Rawson — an expert mechanism designer and ecosystem builder — has taught us a lot about the product development process and how to establish a successful organization. Daniel Bar — venture builder based out of Asia — has taught the founders a lot about community building and fundraising. Wilhelm Roth — CEO of Icoinic Capital with great leadership skills — shared his knowledge on investment management and organization development. And there have been (and still continue to be) many others who helped PrimeDAO achieve its goals with their valuable input, to whom we are extremely thankful.

At PrimeDAO, we firmly believe that collective intelligence and knowledge sharing are key components for developing the ecosystem as a whole. PrimeDAO has the chance to be at the center of an ecosystem made of the brightest minds in web3 while supporting the most exciting ReFi projects. In our constant quest to improve coordination in the space, it seems natural to connect the next generation of founders with those who will truly empower them. That’s why we wanted to create a program where we connect mentors with projects that seek guidance and support.

We’ve done the groundwork to find extraordinary builders tackling challenging missions, and mentors who will scale their impact and improve their chances of success. And we are very excited to be launching our apprenticeship program very soon. More details will be coming your way soon but in the meantime, if you would like to learn more about Prime Launch’s apprenticeship program send in your request through the following e-mail address: marketing@prime.xyz

If you are up for a casual chat join our Discord!

https://discord.gg/primedao

And not to forget our dearest Twitter full of useful and inspirational content:

https://twitter.com/PrimeDAO_

wagmi🤍

On the Importance of Mentorship in Web3 was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

1. Tell us about Silta and what Silta is trying to get done.

Silta is the bridge to a sustainable future. We want to build a better future by directing finance to the infrastructure that can deliver real impacts.

I hope we can all agree that climate change is real. The crazy heat waves and the severe weather events illustrate this. To combat climate change, we need to start building the infrastructure supporting this objective. Silta empowers token holders to act as change agents for building a better future.

In a nutshell, Silta does three things:

• Conduct due diligence and sustainability impact scoring (Silta Score) on borrowers’ debt financing applications
• Act as a marketplace (Financing Marketplace) that brings together borrowers with TradFi and DeFi protocols to broker financing deals.
• Monitor the borrowers’ performance (Project Portal) during the construction and operations of real-world assets.

2. Tell us about the Silta Score. What are the main points you pay attention to when conducting due diligence and impact assessment reports/scores?

The Silta Score is our due diligence framework for assessing borrowers’ applications. Design, build, and operation of infrastructure require a different style of diligence than compared, say, a home loan. This is because the asset does not typically exist when the loan is issued to the borrower (there are some cases where the loan is needed for an extension or refurbishment of an existing asset, like a new lane on a toll road or additional panels at a micro-grid solar site). If a borrower defaults on its home loan, the bank can take over the home and sell it to a 3rd party. But in the case of infrastructure financing, the bank may not have the option to take over the asset if the project is still in its construction phase; thus, they are reliant on the security package offered by the borrower.

When we think about Due Diligence on an infrastructure project, at the highest possible level, there are really three questions to ask:

a) If we lend someone money, how do we get comfortable that we will get our money back?

b) What security can we take if the project fails?

c) And how do we make just they don’t just run off with the money?

To get comfortable with the three questions above, we must undertake a Project Viability assessment by deep-diving into the borrowers’ project and understanding the complexities of the transaction, construction, and operation.

Transaction structure considers things like whether this is a public utility or a private development and whether the borrower is requesting a corporate or a project finance loan. How a borrower answers these questions dictates the level and type of other diligence required as part of the Silta Score.

In the construction phase, we assess five sub-risk groups: technology choice & design risk, construction risk, completion risk, authorization risk and dispute resolution risk.

In Operation Phase, we assess five sub-risk groups: supply, market, political, force majure, and operations & maintenance risk.

Questionnaires have been designed for each risk pillar that interrogates a borrower’s project. Once the questionnaires have been satisfied, we score each sub-risk group, which subsequently rolls up into a score the pillar. We then take the lowest pillar scores, which act as the overall score for the borrowers’ application.

The next step is financial risk assessment. Because this is such an essential piece of the jigsaw, we decided to have this as a stand-alone risk group that can effectively level the base score up or down depending on the results. The summation of this exercise is a Project Viability Score.

In parallel to the Project Viability assessment runs a Sustainability Impact Assessment. We didn’t want to lose sight of sustainability impacts by rolling it up into the Project Viability, so we opted to make this standalone. Here we look at the outcomes a project might deliver if it’s funded and successful. Take WEnergy, of the borrowers in our pipeline. They aim to build solar microgrids across the islands of Palawan that give renewable energy to over 40,000 people, thus removing the reliance on fossil fuels. A tremendous impact that is precisely the type of project we want to see through Silta.

Once the score is finalized, a DD report is created, which is subsequently presented to the Silta Scoring Committee (professionals with relevant experience from our community) to verify the score and adjust the score or down by a limited number of points, if necessary. Lastly, the verified score and DD report are minted into an NFT.

3. How do the projects that get a Silta score get connected to a network of financiers in DeFi and TradFi?

Once the Silta Scoring exercise is done, it’s time to get the borrower’s finance. We showcase the borrowers’ project to a panel of pre-qualified “financiers” from TradFi and DeFi protocols. Staked financiers can view the borrowers’ project and Silta score. The borrower runs project information sessions with support from Silta Finance to the Financiers, which allows for some Q&A. Following this, the Financiers can submit expressions of interest and make financing offers to the borrowers.

4. What are the typical financing amounts that Silta would secure for sustainable infrastructure projects? How is this different from the status quo in project finance?

Silta itself doesn’t raise funds for loans or provide loan pool infrastructure. Instead, we rely on DeFi protocols such as Centrifuge, Goldfinch and TrueFi or TradFi partners to offer the financing.

Typical loan amounts needed for smaller-scale infrastructure projects can range from a few hundred thousand dollars to millions. Currently, the largest deal in our pipeline is 17M USD. We anticipate being able to help finance deals up to 100M USD by using the collective might of DeFi protocols. Why have one DeFi protocol try to fund a project of this size when you can have 3 or 4 working together?

5. How do Web3 technologies help Silta stakeholders in reach their sustainable targets?

Silta rewards for sustainability impacts. We literally pay Silta tokens to projects that make a substantial impact in the world! We also invite 3rd parties such as carbon off-takers to pre-qualify into our marketplace and buy carbon emissions from the projects in our pipeline.

Silta internally takes sustainability seriously. We are blockchain agnostic but would never consider working on a chain that has a negative climate impact. Ethereum switched to proof-of-stake, making us all poor but at least we will live longer!

6. Turning to ReFi, what do you think is the biggest gap right now in the current #ReFi space in web3 between perception and reality? What are the challenges in building web3 towards a sustainable future?

The biggest gap is actually bridging the real world, to the digital world. By that, we mean that there are very few ReFi projects that provide direct real-world usage. This isn’t to say that they’re not contributing fundamentally to the community, it’s just incredibly difficult to work on a concept that’s building on a platform in a constant state of fluidity. We do expect this to change as ReFi develops, noting that it’s an incredibly new field.

a) What can we do to overcome these challenges?

Just time. Everyone can throw as much money as they want at ReFi projects and that will definitely help, but time is the most crucial component of its development. There’s no safe way to rush a new concept, especially one that relies heavily on code and several layers of legislation. The ReFi community needs time to mess up, do things incorrectly, and learn from that. The development of ReFi will be identical to the development of DeFi. We can say it’s all rainbows and unicorns, but it’s not. This is hard work. That’s why we’re so committed.

7. What inspired you most when creating your project?

In 2014 I was running my own consulting business with another Silta Co-Founder Stanley Boots. We landed this deal with Bloomberg and Rockefeller foundation to design a Project Finance model for a fishing port that would monetize the data, thus creating a new revenue stream that brings further financial viability to a PPP transaction. That work was what brought me into the world of sustainability. Since then, I have been thinking about ways to get finance for projects that really matter, so my son lives in a beautiful world.

8. Are there any other #ReFi web3 initiatives that you find successful and we should pay close attention to?

There are quite a few #ReFi projects that are launching or have just launched, that we are paying attention to. ReFi is still a very new and innovative concept, so it’s difficult to identify ‘successful’ projects. We recommend @ReFiPodcast and @ReFiDAOist on Twitter for anyone looking for new and exciting ReFi projects launching.

9. How can different people/contributors get involved with Silta?

Anyone can be part of the Silta DAO by owning any amount of Silta tokens. If you’d like to have a more in-depth involvement, you can apply for a position at the Silta Scoring Committee, Due Diligence Advisors, or Project Monitoring Officers.

10. If you were to have a message for future generations about building a sustainable future, what would it be?

Some people talk a good game about being sustainable, and others take action. Be on the action side, because you have one life at the end of the day, so make a real, sustainable impact for your children and their children after them.

Exploring ReFi with Silta Finance: An Interview Series by Prime Launch was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

ShapeShift DAO is pursuing a token swap on the Prime Deals permissionless platform for DAOs who are interested in collaborating with them on the future of decentralizing finance. ShapeShift envisions a borderless financial system built on open, decentralized protocols, led by their open-source, multi-chain, self-custody crypto platform.

They’re offering up 1,000,000 $FOX in a token swap for DAOs interested in building this vision. There are numerous benefits to holding $FOX. Partnered DAOs can integrate directly into the Shapeshift platform for distribution, vote on ShapeShift DAO proposals, enter into revenue-sharing agreements with other protocols and services integrated into Shapeshift, and receive a percentages of revenues from validators operated by the DAO, as well as revenues from resource allocation in the DAO treasury. This is a huge opportunity to build the future of DeFi with a strong team focused on a future of abundance for all.

Open Proposal Specifics

ShapeShift DAO has made available 1,000,000 $FOX which is worth $57,448 as of the time of this writing (06:00 UTC 2022–09–07).

The DAO seeks strong mission and vision alignment for a potential token swap partner first and foremost, with more details to be found here.

The swap will also give the potential deal partner the opportunity to directly integrate with Shapeshift, which will enable seamless access to cross-chain liquidity with no KYC, custody, or added fees for their potential token holders.

The following deal clauses will apply:

• Mission and Vision alignment: ShapeShift want their goals to be aligned with DAOs they make token swaps with.
• Strong tokenomics: The assets offered for swap should have well-articulated and sustainable tokenomics.
• Chain preference: ShapeShift is chain-agnostic. However, they’re currently only able to use Gnosis Safe to hold tokens–thus, their choice of universe of investable chains is limited to those that are compatible with Gnosis Safe.
• Terms of the token swap: Around $50/100K worth of tokens to be swapped from each party, calculated from 7D moving average.
• Usage of the tokens: Strategic alignment through governance participation is an ideal outcome of potential D2D token swaps. ShapeShift is also interested in seeding joint liquidity pools.

On ShapeShift DAO

ShapeShift enables permissionless, KYC-free, fee-free exchange of assets on its DeFi platform. ShapeShift was the first established corporation to fully transform itself from a centralized entity into a decentralized autonomous organization.

ShapeShift DAO governs ShapeShift, a free open source platform to trade, track, buy, and earn. They saw how fast and innovative open protocols were, and felt that if they were to move as fast as possible they would need fewer gatekeepers and much more flexibility and dynamism. They landed on a DAO as the best way for ShapeShift to thrive in the long term, and announced the conversion to a DAO in July 2021.

Today, the DAO has ten workstreams and 112 contributors, and they are the top rated DAO in Boardroom by projects. Their discord has over 9700 members, and are they are the #22 rated DAO by token holders in DeepDAO.

They’ve made significant progress toward full decentralization in 2022, using a number of PrimeDAO partners and friends such as Colony, Zodiac (Gnosis), and more to execute payments autonomously, enable proposals autonomously, and ensure the least amount of centralization necessary for decision making.

On PrimeDAO

PrimeDAO focuses on researching and developing next-generation coordination tools for decentralized organizations. PrimeDAO is committed to enable DAO2DAO innovation through its products, which can help any DAO launch a token, make a deal, form a joint liquidity pool or venture, and inform DeFi participants on what they’re doing and how they’re doing it.

Get Primed!

We’ve never been more confident that DAO2DAO interactions will drive the future of crypto networks — we think the best way to bring this future into being is to build it.

If that interests you, there’s never been a more exciting point to get involved in Prime and reshape DAO coordination.

If you are a member of a DAO looking to join the networked DAO ecosystem by executing an on-chain agreement with Prime Deals, reach out to us here, or just jump into Prime Deals yourself and start exploring.

If you are committed to enabling DAO 2 DAO innovation and are interested in collaborating with or getting involved in Prime, jump into our Discord now, and let’s get connected!

Prime Deals Open Proposal: ShapeShift DAO 🤝 [Your DAO here] for 1,000,000 $FOX was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

TL;DR

Giveth and PrimeDAO have completed a token swap. PrimeDAO is deeply aligned with Giveth on building a DAO2DAO ecosystem of cooperation and resilience. We believe that one of the best ways to unite on this common cause is to give each respective DAO ownership in the others’ endeavors with a token swap.

On 16 June 2022, Giveth sent 891,329.15 GIV to PrimeDAO’s Treasury and PrimeDAO reciprocated by sending 177,611.69 D2D tokens to the Giveth Treasury.

This swap occurred on our Prime Deals platform.

Why are we doing this?

Giveth and Prime share common cause in creating tools and platforms for DAOs to thrive. This deal seeks to highlight our shared goals and solidify it with a token swap and LP.

On 16 June 2022, Giveth sent 891,329.15 GIV to PrimeDAO’s Treasury and PrimeDAO reciprocated by sending 177,611.69 D2D tokens to the Giveth Treasury.

Giveth is a community focused on Building the Future of Giving using blockchain technology. Our intention is to support and reward the funding of public goods by creating open, transparent and free access to the revolutionary funding opportunities available within the Ethereum ecosystem. Giveth’s mission is to build a culture of giving that rewards and empowers those who give — to projects, to society, and to the world.

PrimeDAO provides crucial infrastructure and accessible tools within the DAO ecosystem for incumbents and new players. This makes DAOs more resilient through cooperation and community. Prime DAO’s mission is to enable DAOs to build a stronger ecosystem across web3.

How did we get here?

Part of Giveth’s core roadmap is to bring on projects and public goods that are creating positive impact in the world and provide them with a flow of tools and education in ReFi and Decentralized Governance. Through this token swap, Giveth is gradually bringing boots on the ground initiatives into the DAO space and eventually creating a token economy around the value they provide.

PrimeDAO’s tooling to empower DAO-2-DAO coordination and collaboration is, therefore, perfect fit for Giveth’s vision. A token swap between our two organizations was a no-brainer.

What’s next?

Giveth will not liquidate the received D2D tokens nor will Prime DAO liquidate their received GIV tokens unless explicitly negotiated.

We hope that by facilitating token swaps on a great platform like Prime Deals, we can drive the DAO ecosystem forward for the entire community by increasing the quality standards of DAO2DAO engagements.

If you are a DAO looking to join the networked DAO ecosystem by executing an on-chain agreement with Prime Deals, reach out to us here, or just jump into Prime Deals yourself and start exploring.

Get Primed!

We’ve never been more confident that DAO2DAO interactions will drive the future of crypto networks — we think the best way to bring this future into being is to build it.

If that interests you, there’s never been a more exciting point to get involved in Prime and reshape DAO coordination.

If you are committed to enabling DAO 2 DAO innovation and are interested in collaborating with or getting involved in Prime, jump into our Discord now, and let’s get connected!

🕸 Site | 💬 Discord | 💭 Telegram | 🐤 Twitter | 📨 Newsletter

Giveth 🤝 PrimeDAO Token Swap: A Partnered Deal Update was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.

Authors: Lavi & Dabar90

TL;DR

• In this article we analyse the collateral listing process of Aave, Compound, Euler Finance and MakerDAO
• While the basic flow of the process is quite similar, each protocol has distinct elements — especially when it comes to risk assessments — that are used to determine the final decision
• Most of the older protocols have a very thorough and resource-intensive listing process; only Euler uses a unique and permissionless approach
• After an asset is listed, only market-related risks are continuously monitored, which leads us to the conclusion that there is high potential for Service DAO’s to support streamlining the listing process, as well as the continuous monitoring of other risks

Introduction

Adding a new collateral to a DeFi protocol can be a cumbersome process that differs quite significantly between protocols. There are many considerations that flow into the final decision before adding a new token. Most of them are risk-related, such as technical risk, market risk, centralization risk or legal risks. Other considerations look at the potential the asset can bring once listed, such as potential for TVL or additional loans.

In this article, we are going to look at different approaches applied by the most prominent lending protocols in DeFi. In the first step, we will analyse each approach and then compare them in order to determine what the differences are and how we can use different strategies for risk and quality assessments.

Adding Collateral

Leading money market protocol Aave has 32 assets that can be deposited into the protocol as collateral. Close competitor Compound on the other hand has only 17 assets available for deposit, while new entrant Euler already has 64 assets enabled. However, in terms of collateral, Euler is actually more conservative than its older peers, as of today only seven of all available tokens are actually enabled as collateral.

The difference between the OGs and the new kid on the block, is the effort required to list an asset on one of the protocols. Euler is designed to be a permissionless lending protocol, whereby any asset can be listed (in the lowest tier) without the need of governance, which makes it an ideal candidate for long tail assets. Aave and Compound on the other hand have more stringent processes to add new collateral, which are permissioned through their governance systems. The same is true for MakerDAO, the issuer of the stablecoin Dai has core teams that evaluate each new asset applying for collateral status, however, the final decision is always left to token holders.

In the next sections we will look at all four protocols and compare their processes for listing a new asset to their respective protocol.

Getting listed on Aave

On Aave, assets can be listed in many different markets, whereby each market operates as a segregated risk pool, and every newly added asset affects the risk of that particular market. For instance, Aave has different versions of markets that are still live (V2 & V3), there are markets for distinct chains (e.g. Ethereum mainnet, Arbitrum, Polygon, etc.) and there is also an AMM market, to which users can deposit LP tokens as collateral.

For a new asset to be added to one of these markets, there is a five-step process whereby four main considerations must be covered by each proposal and discussion:

1. The increased insolvency risk of the market it is listed in
2. The potential to expose the market it is listed in to a single point of failure
3. The risks associated with collateral currencies
4. The benefits of protocol/market diversification

All of the above points are looked at in detail throughout the listing process, which consists of the following five steps:

Step 1 — Create an ARC: Proposing the asset via an Aave Request for Comment (ARC):

• An ARC for a new asset can be initiated by using a template, to provide information about the protocol (e.g. link to whitepaper, source code, Ethereum addresses contracts, ChainLink Oracle, etc.). The template also requires details about the token and a rationale for why listing the asset should be beneficial for the Aave ecosystem
• In addition to the ARC, a Risk Analysis is required to understand the underlying risks and to define the parameters for integration. The risk assessment covers smart contract risks, counterparty risks (decentralisation) and market risks.

• Next, the Parameter Suggestions are added, whereby the proposer shares the risk parameters and interest rate curves that are considered in case the asset is listed. In contrast to other risks listed above, risk parameters are monitored further once the collateral is listed. Typically three risk parameters are applied, these are liquidation bonus (liquidation incentive), loan-to-value (collateral factor), and liquidation threshold (close factor). For Aave and Compound, these parameters are monitored by Gauntlet and dynamically adjusted depending on market situation.
• Finally, a Snapshot vote is set up (requires 50 $AAVE) to gather Community Sentiment. This step helps in checking community interest and risk parameter preferences.

Step 2 — Preliminary AIP: After positive community sentiment, an AIP can be prepared using the same template as in the first step. However, proposing an AIP currently requires a threshold of 80k $AAVE the proposer needs to hold or have delegated.

Step 3 — Chainlink price feed: Every asset requires a price feed that needs to be requested by contacting Chainlink or Aave Genesis team.

Step 4 — Prepare the Payloads: Each asset listing proposal must include the necessary payloads (e.g. aToken, debtTokens, and InterestStrategy contracts). Here is where the on-chain preparation begins, along with a pull request for token parameters and a deployment script.

Step 5 — Submission of proposal: The proposal can now be submitted on-chain, including all of the information from the above steps.

In summary, the Aave listing process tackles many relevant risks that come with a new asset. However, some are looked at in more detail and others are considered on a higher level. As displayed above, the smart contract risk and centralization risk are evaluated using only two proxy metrics, i.e. maturity (days of existence of the smart contract) and number of transactions. The older and the more transactions, the less risky. To estimate the centralization risk, the framework looks at the number of token holders and the centralization of permissions.

It can be argued that once a standard framework is provided, its benchmarks can be increased artificially to achieve the required threshold (e.g. in this case, the number of token holders or trading volume). However, this would need to be done over a prolonged time period, for the listing process can take months and it can be assumed that Gauntlet would point out potential issues when doing their assessment. Nonetheless, as we’ll learn later on, other protocols look at more metrics to estimate specific risks.

Getting listed on Compound

Compound’s listing process was recently reviewed by OpenZeppelin and supplemented with checklists and guidelines. The Compound asset listing process consists of the following 9 steps:

Step 1 — Initialization: Starting the procedure by filling out a checklist to provide context about the asset and associated risks. The initial checklist is the most comprehensive protocol overview — that is mostly a preliminary risk assessment — out of all four protocols. The template covers the following sections, whereby the smart contract category requires the most information. The list below is an overview and not exhaustive:

• General — a protocol overview and links to resources
• Market risks — historical volatility, liquidity on exchanges, emissions schedule, etc.
• Decentralisation — token distribution, privileged roles, is it pausable, blacklist, etc.
• Smart contract risk — codebase & on-chain activity, security, smart contract behaviour, upgradeability
• Initial requirements — setting the initial risk parameters

Overall the full checklist consists of 56 individual questions and check marks that need to be answered. This task is currently done partially by community members, OpenZeppelin and Gauntlet.

Step 2 — Community check: The proposal is first posted on the forum and the community reviews the information provided in the checklist

Step 3 — Risk analysis: In this step, Gauntlet conducts a risk assessment as outlined in their framework. Within this asset, Gauntlet looks at specific risks related to:

• Security aspects of the proposal and potential governance impacts for Compound
• Market risks, such as price manipulation, insolvency and liquidity risk, not incentivized liquidations and cascade effects
• Asset specific risks, such as compatibility and compliance

Essentially, the results are used to determine a recommendation for an initial risk parameters setting (Reserve Factor, Collateral Factor and Borrow Cap). However, Gauntlet specifically declares that they do not cover oracle risk, infinite mint attacks, governance attacks, smart contract risk, centralization risk, or other technical risks and they defer to OpenZeppelin for these categories.

Step 4 — Tooling and simulations: The community checks if the implemented contract matches the base implementation with the expected parameters

Step 5 — Contracts deployment: Contract are deployed (potentially on testnet), which also serves as a check whether new oracles need to be set up

Step 6 — Formal proposal: The formal proposal is drafted

Step 7 — Audit: The proposal is audited by OpenZeppelin or another third party

Step 8 — Proposal submission: Proposal is submitted for voting on-chain (this requires minimum of 25k $COMP tokens) and voted on by COMP holders

Step 9 — Post-Launch Parameter Update: Parameters such as collateral factor or reserve factor are updated once the asset is live

By comparing both Aave’s and Compound’s listing process, it becomes clear that they both consider mostly the same risk categories and the process is similar. However, Compound does have more requirements in the initial phase (longer checklist) and they also audit the proposal before final submission, which is not the case at Aave.

On the other hand, Compound hasn’t added a new asset since February 2022 and only seven assets have been proposed for listing within the last 12 months. It can be assumed that the time consuming and strict listing process plays a role here.

Getting listed on Euler Finance

Euler has introduced a new concept for permissionless token listings, targeted toward long-tail assets. The difference between Euler and its older peers is that Euler has introduced a system of asset tiers, defining what each asset can be used for. This allows Euler to reduce the asset listing process to one requirement — at least for the lowest tier — which is a WETH trading pair on Uniswap V3. This pool serves as the oracle for the time-weighted average price (TWAP) to analyse TVL and slippage metrics for a TKN/WETH pair.

The Euler risk management concept uses the following asset tiers:

1. Isolation tier — available for lending and borrowing, but cannot be used as collateral for borrowing other assets. Assets in the isolation tier can only be borrowed in isolation from other markets because liquidation events cannot affect other markets
2. Cross Tier — available for lending and borrowing, cannot be used as collateral but can be borrowed alongside other assets. Cross-tier assets allow more flexibility in collateralization but also add more risk to the protocol than assets from the isolation tier. Hence a first risk assessment is required to enable a token for this tier.
3. Collateral tier assets are available for ordinary lending and borrowing, and cross-borrowing, and they can be used as collateral.

Step 1 — Permissionless listing: As mentioned above, adding an asset to Euler only requires a TKN/WETH pair on Uniswap V3.

Step 2 — Risk Rating: To assess whether an asset can move up to a higher tier, the team has implemented a rating system to evaluate the following four risks:

• Smart contract risk — a check whether the protocol was audited, the number of days the protocol has been functioning without hacks and deeper research if needed
• Centralization — this is measured by estimating the median size of token amount per holder. When the ownership structure isn’t transparent, they employ more forensic due diligence
• Volatility — this parameter is measured via realised volatility (and implied, if available)
• Liquidity — this is measured by estimating historical slippage caused by a certain amount of volume

Step 3 — Governance Vote: The risk ratings are used to define the risk parameters which are added to the proposal. Finally, it’s the EUL token holders deciding via governance vote whether an asset can move up to a higher tier or not.

In addition, Euler displays the oracle risk for each asset, which is based on the Uni V3 TWAP and measured by Cost-of Attack. An open-source oracle tool was developed to assess this.

Moreover, Euler also looks at the borrow factor. The metrics used to define the regular collateral factor are also considered for defining the borrowing factor, to evaluate the risks associated with the asset that is being borrowed. For Aave or Compound, borrowed assets are mostly stable coins. With Euler, however, more volatile assets can be borrowed which introduces additional risks. In that way, Euler takes into account risk for both sides — collateral and debt asset risks.

In summary, asset listings on Euler Finance are permissionless, but currently limited to Uniswap V3 WETH pairs (a Chainlink integration is also planned). Every asset starts at the isolation-tier level and EUL holders decide via Euler’s governance system if an asset can be moved to a higher tier. The proxy metrics used to assess the risk ratings are few in numbers and, similar to Aave’s risk assessment, a predefined framework of standards decides what rating is given.

Getting listed on MakerDAO

The collateral onboarding process for MakerDAO is slightly different from the three lending protocols described above, because in this case, it is a CDP (Collateral Debt Position) protocol that functions as a stablecoin issuer (DAI) and all processes over protocol are governed by community. Getting listed on Maker basically implies that the token can be used as collateral, which is not necessarily the case for a listing on a lending market.

At Maker the collateral onboarding process is more complex, detailed and targeted for community involvement, compared to the previous protocols. Another difference to the lending markets above is that MakerDAO — in addition to crypto-native collateral — allows onboarding collateral in the form of Real-World Assets (MIP67). However, for this article we only focus on collateral listings of ERC-20 tokens.

Step 1 — Application: For crypto-native collateral (ERC-20 tokens) the procedure starts with the Collateral Onboarding Application which is then published on the MakerDAO forum, where the application will be discussed over two weeks. The following points are covered within the application (not exhaustive):

• Background information — Overview, history, links to resources and info about the party requesting the listing
• Asset information — Type of asset, exchange listings, MCap, oracle data sources, etc.
• Business questions — Expected use case of the Dai generated by the vault, strategic benefits for MakerDAO
• Legal questions — legal risks associated with the collateral, jurisdiction, regulatory registrations of the asset, decentralised vs trusted asset, etc.
• Technical questions — Audits, access control, whitelist/blacklist function, upgradability, rebase mechanism, etc.

The application form is similar to the checklist used by Compound, but instead of 56 items this first check only requires 36 inputs. Further, the list is less heavy on technical risks, but therefore has more questions related to the legal situation of the asset.

Step 2 — Greenlight Poll: After the two week discussion period, the proposal is eligible for Community Greenlight Poll, an on-chain poll that measures community sentiment about the proposed collateral type. These polls usually last 2 weeks and are scheduled for the first or third Monday of the month.

Step 3 — Collateral Status Index: All proposed collateral types that pass through the community greenlight polls are added to the Collateral Status Index spreadsheet and Collateral Onboarding Prioritization Framework spreadsheet by a Governance Facilitator or the collateral onboarding domain teams.

MakerDAO has three domain teams for collateral onboarding assessment. Each is responsible for covering distinct aspects of the listing evaluation:

• Collateral Risk Evaluation (by Real World Finance Core Unit) — covering background, market risks via token metrics or exchange activity, DeFi presence, and risk parameters (see example)
• Oracle Assessment (by the Oracle Core Unit) — covering components such as Median and OSM (see example)
• Smart Contracts Technical Assessment (by the Protocol Engineering Core Unit) — covering technical risks related to the smart contracts and the token (see example)

Step 4 — Governance Poll: After each domain team conducts a collateral assessment for its area, it publishes an assessment on the Maker Forum and begins the Governance Poll, which measures the sentiment of MKR holders with regard to the published assessments.

If the Governance Poll passes, it is necessary to schedule an Executive Vote within 30 days. This time period allows the domain teams to further test and verify the collateral type for onboarding. If the Governance Poll doesn’t pass, the collateral may be resubmitted up to two more times.

Step 5 — Executive Vote: The Executive Vote proposal is written by a Governance Facilitator, and the Executive Spell is prepared by the Smart Contracts Domain Team. If the Executive Vote passes, the collateral asset will be added to the Maker protocol by activating the Executive Spell.

In summary, the Maker DAO collateral onboarding process requires three governance events (two polls and a voting event). In comparison, that’s at least one more vote than the other protocols we looked at. Furthermore, MakerDAO’s assessment goes into more detail on most risk categories compared to the other protocols, except for the smart contract risk, where Compound’s evaluation is more comprehensive.

A Comparison of all Processes

In conclusion, all of the four processes follow a somewhat similar approach. However, the differences — especially in determining the risks related to the collateral — are quite significant and MakerDAO as well as Compound are leading the evaluation process when measured in depth of the risk assessment. However, the advantages of fast-tracking the listing process are obvious, shown evidently by the difference in assets listed on each protocol.

The image below displays all stages of the processes and their differences, leading to the final decision, which is always left to the respective token holders via a governance vote.

Similarities

In summary, the following similarities stand out:

• Overall, the processes are subdivided into similar steps, starting with a template for the initial proposal and a community sentiment check, and ending with a governance vote
• When it comes to the risk assessment, the same categories are evaluated by all protocols. These are market risk, counterparty risk (decentralisation) and technical or smart contract risks. There are, however, significant differences in how risks are measured, but more on that later
• In general, there are high upfront costs for investigation and research before it comes to a first signalling vote (expect for Euler)
• All protocols use on-chain voting systems for the final vote (also Euler is about to launch governance
• All protocols will adjust an asset’s “status” in a later phase. This means that after a new asset gets listed, its collateral factor and other risk parameters are either decided after the listing occurs (at Compound the initial collateral factor is 0), or they can be changed later on, thus affecting the assets status. These risk parameters are decisive for whether the asset can actually be used as collateral and how efficiently it can be used. For Compound and Aave, it’s Gauntlet’s dynamic risk parameter proposals that do this. For Maker it’s the risk teams that propose the changes, and for Euler it’s the tier system through which an asset can be promoted to a higher tier

Differences

As we alluded to before, all of the protocols also differ quite significantly in certain areas of the process. Let’s dive into some of the most prominent distinctions:

• Only Aave and Compound employ third party service providers to support risk assessments and audits (i.e. Gauntlet and OpenZeppelin)
• MakerDAO has the whole process internalised, so that the community and specialised core groups of the DAO cover all of the work
• Compound is the only protocol conducting an audit of the final proposal before submission
• There are also differences in oracles being used, which influences the onboarding process. Euler uses the TWAP from Uniswap V3, Aave and Compound use Chainlink’s price feed — in addition to a backup oracle (e.g. Uni V2 for Compound) — and finally Maker uses its own oracle module that is deployed for each collateral type.

Further, there are multiple differences when it comes to risk metrics and the measurements that are applied:

• Euler has the lightest assessment with only five proxy metrics used to evaluate the associated risks. They heavily rely on their oracle price manipulation tool and that the users of the protocol take it into consideration when deploying or borrowing funds
• Compound has the longest checklist for risks, with a strong emphasis on technical and smart contract risks
• Aave and Euler provide and apply a public risk framework, resulting in a rating for each risk metric
• Market risks are always used as a basis to derive risk parameters (e.g. collateral factor), but there is no standard. All protocols look at similar risks, but use different proxy metrics to measure them. Some examples are:
• Aave looks at market cap, average 24h trading volume and normalised volatility (measured as normalised fluctuations in the price and calculated as the standard deviation of the logarithmic returns)
• Compound uses market cap, volatility (measured as standard deviation of log-returns for specific time frame), liquidity on largest exchanges, and the total supply plus the tokens emission schedule
• Euler evaluates liquidity (measured by historical slippage), and volatility (measured as realised/implied volatility)
• MakerDAO looks at many different aspects to determine risk parameters, which also seem to be different depending on the asset. However, market-related risks are measured by available liquidity (measuring slippage), trading volume on DEXs and CEXs, downside risk (in correlation to ETH) and other integrations within DeFi (see example here and here)

Final Thoughts

Collateral listings are a lengthy and comprehensive process, and typically the duration from start to finish takes several months for the more conservative protocols like Compound and Maker. To conduct this procedure, only Compound and Aave employ third party service providers, both of which are centralised entities.

We also noticed that only market-related metrics are actually continuously monitored, mostly to inform risk parameter adjustments, while the larger rest of the risk assessment is basically a one-time task. The exception here seems to be MakerDAO, where the risk teams also take into consideration other changes affecting an asset. It can be argued that only market related risks have a high possibility of changing for the worse very quickly, while other risks such as smart contracts or centralization change much slower. However, this nonetheless poses the question: Why do all this research, when the large majority of the risk metrics used to conduct the initial assessment are not monitored after the listing?

In conclusion, we truly believe that there is high potential for streamlining parts of the process, for instance by leveraging external service providers that are able to conduct the required research in a more scalable approach and in addition, can offer a monitoring service to ensure that also decentralisation, smart contract and other relevant risks are kept under surveillance. Especially for newer and less wealthy protocols that can’t afford the expensive services of Gauntlet or hire their own risk core-unit, risk-evaluation-as-a-service could be an interesting option.

At Prime Rating we have developed a comprehensive framework to evaluate quality and risks in DeFi. Together with DeFi Safety, our solution covers everything from smart contract risk, to decentralisation and tokenomics, team experience, as well as governance influence and thus potential threats through permissions and access keys. Moreover, through our community-based and open source evaluation process, we ensure up-to-date reports that can easily be turned into a monitoring service.

To sum it up, we have looked at the most established and prominent lending and stablecoin protocols within DeFi, plus one new entrant, and concluded that especially the former three apply very thorough risk assessments when it comes to allowing new tokens to be added to their platform. However the effort is less exhaustive when it comes to continuously monitoring the risks assessed.

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Prime Rating builds and maintains a permissionless rating framework for quantifying quality and risk of web3 protocols. Our Rating App offers a simple and comparable benchmark, in the form of a letter rating, on a scale from A+ to D.

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Enabling Collateral in DeFi Lending — Why Your Favorite Token Might Not be Listed Yet was originally published in PrimeDAO on Medium, where people are continuing the conversation by highlighting and responding to this story.