BOND Farming - Shaken, Not Stirred

TLDR: Propose to create new PickleJars to farm BOND (1400% APY Pool2, 50% APY Pool1)

Greetings Picklers!
First off, I promise this post will be shorter than the last one :wink:

I think we have an opportunity here to capture some fresh TVL and some juicy APYs.

For those unfamiliar, Barnbridge launched their liquidity mining program 11 days ago and it’s been a resounding success so far ($520M TVL at the time of writing)
Their basic premise is a bridge between traditional finance and DeFi through the use of ETH-based derivatives. More details here.
The project is audited and VC backed with a public dev team, so security concerns are minimal.

BB currently has 2 active liquidity pools:

Pool1 is the stablecoin pool and runs for 25 weeks and earns 32K BOND/week.
There’s currently $500M in pool 1 and BOND is trading at $150 for a weekly yield of $4.8M (1%) = 50% APY
Pool1 accepts USDC/DAI/sUSD under a Proof of Capital structure. There’s no IL involved here and it doesn’t matter which coin you deposit.

Pool2 USDC/BOND is their power pool and it runs for 100 weeks, earning 20K BOND/week (flat emissions, no weekly reductions)
There’s currently $11M in pool 2 and with BOND trading at $150, we get a weekly yield of $3M (27%) = 1400% APY
Pool2 is a Uniswap USDC/BOND pool

Sound good so far? Here’s the catch -> BOND rewards are paid out weekly and you get nothing if you withdraw before the end of the week (epoch).

Here’s my proposal:

Step 1: Create a PickleJar to farm Pool1 and direct some PICKLE emissions to it as an incentive (nothing major, 1-2%). This should attract some stablecoin TVL as the combined APY will be very attractive.

Step 2: At the end of each epoch, the strategy will claim BOND rewards and do ONE of the following:
A. Sell half the BOND for USDC and supply liquidity to Pool2 @ 1400 APY (no risk to initial capital)
B. Do NOT sell any BOND, take an equivalent amount of USDC from invested capital, and supply liquidity to Pool2 (Higher returns but with a small risk to initial capital, 1% a week, capped at say, 5%)

Step 3: Claim the BOND rewards from pool2 weekly, and again do either A or B

Rationale:
I’ve been following BB since inception, and nobody expected it to explode like it has. (pool1 had $10M 10 days ago). There are a lot of small farmers that are unhappy that it’s become a whales’ game. (too few BOND to go around) .While these farmers would like to supply their farmed BOND to pool2, it’s currently uneconomical with gas prices and their low allocations.
This proposal would automate that for them (basically giving LT BOND farmers a fire-and-forget solution)
I believe that this sort of farming with a twist can attract fresh TVL to Pickle.
Once they are here…free swaps make it likely that they will stay, as we have attractive options for whatever crypto they wish to park.

Pros

  • Single-asset stablecoin solution (users can deposit USDC/DAI/sUSD directly)
  • Minimal PICKLE emissions required
  • BB is currently the hot potato…doing this would give us great exposure
  • Huge TVL…we only need a small % to move over to make this a successful endeavour.
  • Long, flat emissions schedule…as long as BB keeps the price supported, APYs will last for a long time.
  • Audited, VC backed, public dev team
  • This would be another industry-first innovation from Pickle
  • Gives us a stablecoin option with 50%+ APY while we wait for the Curve boost.
  • By doing it this way, we can collaborate with BB as their goal is also to drive Pool1 farmers to Pool2. We won’t be seen as ‘hostile dumpers’

Cons

  • Weekly rewards
  • Might cannibalize TVL from our 3pool and DAI jars. However, if this happens, we might need to buy less CRV OR we can use the excess CRV to boost the renBTC pool.
  • Added complexity, not sure how hard it would be from a dev standpoint.

Thanks for reading! Please share your thoughts.

EDIT: After consulting with the team, I learned that implementation of the above solution may be too complicated and might take some time.

So, we can start with a basic PickleJar for Pool1
Accept single-asset deposits USDC/DAI/sUSD and sell the weekly BOND rewards for 50% APY + any PICKLE emissions

If successful, we can work towards implementing the more complex strategy outlined above.

Putting up a poll here to gauge community interest.

  • Issue Licence To Kill
  • Do nothing

0 voters

5 Likes

RIP Sean Connery…one of the legends
I propose that we dedicate this pJar to his memory

2 Likes

I like the idea for several reasons:

  • It’s a relatively safe place to park USD
  • Good yield
  • Bond is a high-profile project and us being first out of the gate should bring some exposure to us
2 Likes

I like the idea and the initiative, but as with the launch of Barnbridges, I’m not sure what to vote for …
There is also Geyser :sweat_drops: which gives me the eye (gysr.io).

… and for now, all my marbles (or almost) are in Pickle ^^
I don’t think I’m ready to risk a few tokens right now :roll_eyes:

In order to try and allay the Pickle community’s concerns regarding smart contract security, I reached out to Tyler, one of the BB founders. As it turns out, the BB team are already members of our community.

Tyler: “You can tell the pickle community I’m a pickle holder and a pickle believer and my xbox gamer tag is the pickle bomber.”

Here’s what he had to say about audits and security:

Audit report from Hacken here

Tyler: "We also did intense internal audits and some of our team worked on consensys diligence products. Atpar audited the code as an advisor. And we’ve had MASSIVE community outreach looking into potential bugs or backdoors and nothing has panned out. Naturally we have to follow up on every single one though so our team has been inundated.

To be completely transparent that TVL is the largest bug bounty in history. Everyday $500m grows and isn’t hacked it should signal to the community that the contracts are less risky because I can assure you people are trying to hack it and have been trying to hack it for 3 weeks now.

The longer it goes unhacked is more valuable than any audit we could possibly pay for. Knock on wood but that’s the way you should be looking at it.

We are considering additional audits with Open Zeppelin and a massive bounty program but we don’t have a ton of details outside of that."

Is BB vulnerable to flash loan attacks a la Harvest?

Tyler: “I’m not sure how you can exploit a stable pool like that though - there is no arb opp against stables unless you can force one to go unpegged which is why we didn’t include Tether. In that scenario because we coded all stablecoins to be listed as units vs. as their $ amount so we wouldn’t have oracle risk. So if you could manipulate one of the stablecoins to go unpegged DRASTICALLY you could ape in and provide sUSD worth .20 and get a massive share of the pool for a lower price. However, underlying user funds would not be at risk in this scenario it would be an arb opp allowing you to get an uneven amount of $BOND per your commitment. The existence of the 7 day epoch reduces this. Further, if you could manipulate stablecoin prices in the way I’m describing I feel like you could find much better ways to profit more immediately then sitting in the BarnBridge pools hoping the arb gap doesn’t close.”

I really think this could be a successful long term partnership.
Like I’ve said many times, I’m here to stay because of the Pickle team and community.
I find the BB team extremely competent and approachable, and think we could build great things together…

3 Likes

Okay, so I’ll give the designers the benefit of the doubt.

You have my vote.

This partnership seems low risk with an attractive return. I am ready to try the experiment, to see in time how it could evolve.

Now I don’t know if Pickle’s devs planned such a short-term strategy :slight_smile:

In tribute to Sean Connery

3 Likes

Sounds like a well thought through plan, would be interested to hear the Devs comment on feasibility and risk. I see you have mentioned the flash loan risk, but still worth an expert opinion.

Also creates a broader question of the type of yield Pickle wants to go after … As new players emerge should Pickle be nimble enough to go after potentially short term opportunity like this?

1 Like

As others have pointed out, the risk is something new, I know BB is trusted but it would be the first time we have interacted with something newer than ourselves. I’d value the devs input on this! But the idea and strat seems profitable and tasty!

4 Likes

Very interesting proposal. Love what Barnbridge is doing, fully support collaboration between the projects.

1 Like

Love the idea, and I think it would be a great way to move pickle towards a tiered set of investment strategies (ie. stablecoin, low-risk, and high-risk strats), therefore catering for the full spectrum of risk appetites. This would fit well as the high risk strategy!

1 Like

Great write up and proposal. I am for this as expanding our jar offering will only help increase TVL and as you mention has such high APY we may not need to add PICKLE emissions. I am in favor!

2 Likes

The Connery PICKLE.
I’m down for this.
Please take my internet money.
Thank you @yyctrader

2 Likes

I am also for this. These strats are exactly what we need in order to keep attracting TVL. Especially with our withdrawal fees being bygone soon.

I think one issue this bears light to is that we have maxed out our PICKLE rewards, we should always have a buffer to reward new strats that we give out as a bonus (to the power pool :stuck_out_tongue:) when it’s not being utilized.

1 Like

I really like this idea!
Perhaps a 3-5% allocation that’s pre-approved by the community?
It would allow us to maintain our agility as we grow.
It would also mean we can finally launch jars and farms concurrently :pray:

I envision that future votes to reallocate emissions will only become more contentious over time as the community gets larger and overall emissions keep declining. It’s only logical that users will want to protect their own bags.

Btw, you forgot to vote :wink:

1 Like

I like the buffer idea too particularly as UNi farming ends, it’s always harder to take %s away from farms than add them, so having a reserve would be great.

1 Like

Nice idea! If possible, could be another string to add to our bow…

1 Like

I support the BOND project directly but i’m not sure BOND is so attractive to mine due to the price vol in the near term. BOND price has dropped from around $150 to below $30 in the last week. Due to the game theory of the current design observers predict the price to drop each week at the end of an epoch due to rewards being claimed and liquidated. Again, I support this project for the long term but BOND near-term future price may have some large downside uncertainty. I’m not sure the dev team can respond as quickly as BBB and the crew, but I know they are trying their hardest to respond to the situation. That said, the rewards of their pool 2 are substantial compared to pool 1 if you are receiving the BOND as interest, as opposed to swapping into/purchasing BOND.

Overall I would still support a farming initiative for this project because i think the core underlying mechanics are interesting and the project is just getting started.

Just my humble opinion!

edit: RIP Sean

1 Like