Propose to Add Gauge to Liqee Lending

Proposals
1

Liqee’s community expressed strong interest in onboarding more liquid staking assets, with stETH taking the lead. With this proposal, stETH holders are able to generate handsome lending interests on their ETH holdings, achieve up to 3x staking yields, mint USX stablecoin against wstETH (and possibly its related LP tokens), borrow other assets, and earn LQE (governance token of Liqee) rewards to improve investment return.

Intro to Liqee and USX

Liqee is the world’s largest decentralized lending protocol for liquid staking assets, with all lending and borrowing activities facilitated through smart contracts in a decentralized manner. Liqee Lending currently support ETH, BNB, DOT, ATOM, FIL, XTZ, and rTokens backed by StaFi with a total supply of $33m.

Liqee’s core team include experts with a long-track record of success in PoS validation service and DeFi lending. As an eco-partner of BlockPower (one of the largest validators for Cosmos and Tezos), Liqee also provide tokenization for PoS and mining facilities, as well as PoS validation across a number of networks.

USX is an overcollateralized stablecoin launched by dForce, the #1 lending protocol on Arbitrum and #2 on BSC in terms of borrowing volume. Users can mint USX against a variety of yield-on collaterals (ETH, BNB, USDC, etc) which will effectively reduce the cost of capital (minting fee) for users.

Liqee is also an important eco-partner of dForce, utilizing the smart contract of dForce Lending and integrating with USX stablecoin natively. dForce Lending is audited by 4 top audit firms including Trail of Bits, ConsenSys Diligence, CertiK and Certora, click here to view full reports.

Background

At present, users can mint stETH through Lido for immediate access to staking yield, or supply ETH/stETH to Curve for a pro rata share of trading fees and CRV rewards.

Compared to staking and trading, lending is a helpful supplement alleviating some of the most pressing issues for end users (non-trading liquidity with zero impermanent loss, the most cost-efficient access to leveraged staking, etc).

With more than $40m ETH liquidity resting currently with dForce and Liqee, this proposal is expected to help Lido onboard more audience in the shortest possible time, unlocking a variety of multiple approaches for users to further improve their return on investment.

Proposal

We hereby propose Lido to incentivize deposit of wstETH and stETH/ETH LP with $100,000 ($50,000+$50,000) in LDO rewards per week, for 3 months (12 weeks) as a start.

Liqee already announced its collateral support to wstETH (starting from 20 Oct) and its plan to support its related LP tokens. With the proposed LDO rewards ($50,000 for wstETH), it is expected to bring Lido approximately $30m worth of stETH new minting.

Liqee could provide the following:

  • extend collateral support to wstETH (and possibly its related LP tokens)
  • reward lending of wstETH (and its related tokens) to Liqee Lending with LQE token.
  • reward borrowing of ETH from Liqee Lending with LQE token.
  • reward minting of USX from Liqee Lending with LQE token.

Motivation

Lending, as non-trading liquidity, removes impermanent loss and unlocks an inspiring approach to leveraged staking. Upon implementation of this proposal, stETH users can:

  • achieve up to 3x staking yield through leveraged borrowing.
  • generate solid returns on deposited ETH – leveraged staking will encourage more ETH borrowing.
  • mint USX stablecoin against wstETH (and possibly its related LP tokens sitting idle in our wallets).
  • borrow other assets against USX from dForce Lending.
  • participate in a variety of DeFi activities and earn more with borrowed assets.
  • mine LDO, LQE (governance token of Liqee) and DF (governance token of dForce) tokens.
4 Likes
2

Support. Glad to see the extension of use case to lending.

1 Like
3

support, look forward to the early cooperation between Lido and Liqee!

4

Lookin forward to it

5

stSOL is also a considerable choice.

6

Great, strongly supported.

7

Does this mean I have a chance to get more revenue from my ETH? :grin: :grin: :grin:

8

Hi Lizzy,

Couple of clarifying questions about the proposal.

The $40M of ETH liquidity you refer to appears to be split across Liqee, dForce and the various platforms each of you are launched on (ETH, BSC and Arb for dForce). dForce appears to have the concentration of this ETH.

  1. How will this proposal create a pathway for users to stake with Lido? Put another way, since Liqee is a separate platform from dForce, how will those users discover and potentially migrate to Liqee instead?

  2. You claim $30m worth of stETH new minting. Can you clarify the flow you see driving this?

  3. The initial incentive program is for $1.2M over 12 weeks. I would counter that the incentives should be focused on wstETH only at first to measure the success of the program. Thoughts?

  4. How does the DF token come into play? Liqee is using dForce contracts but I don’t see how users would earn DF.

1 Like
10
  1. How will this proposal create a pathway for users to stake with Lido? Put another way, since Liqee is a separate platform from dForce, how will those users discover and potentially migrate to Liqee instead?
    As a vertical lending market dedicated to liquid staking assets, Liqee partner with dForce to promote the emerging asset class and is integrated with USX (dForce-backed stablecoin) natively so that users can further leverage dForce’s existing lending pools and liquidity, hence the TVL of both protocols are integrated.
    Liqee is one of the few lending protocols accepting wstETH as collateral. Minting USX on Liqee is cheaper (1.5% APY). That said, wstETH user can supply wstETH as collateral to mint USX on Liqee, then borrow ETH against USX with negative interest rate on dForce, and mint more wstETH。
    image
  2. You claim $30m worth of stETH new minting. Can you clarify the flow you see driving this?
    1. StaFi followed the same flow above and harvested $30m staking assets (rATOM, rDOT, rBNB) through the collaboration with Liqee and dForce.
    2. All ETH currently sitting on dForce and Liqee are reserves that have a good chance to be converted into stETH.
    3. dForce, as the largest decentralized lending protocol in China, maintains a solid relationship with ETH mining pools and a number of big miners.
    4. Liqee will work with dForce’s community in educating the market on how to make the best use of staked ETH in other investment possibilities.
  3. The initial incentive program is for $1.2M over 12 weeks. I would counter that the incentives should be focused on wstETH only at first to measure the success of the program. Thoughts?
    $50K per week for 12 consecutive weeks, totaling $600K for wstETH, as a start.
    We target to onboard stETH’s related LP tokens (i.e., stETH/ETH Curve LP) shortly so that users can borrow more ETH for leveraged staking yields (click here to view tutorial). It would be great for Lido to grant the same level of rewards to incentivize the LP token, as soon as it becomes available on Liqee
  4. How does the DF token come into play? Liqee is using dForce contracts but I don’t see how users would earn DF.
    Users can use wstETH as collateral to mint or borrow USX on Liqee, and then use USX as collateral to borrow other assets from dForce. USX functions as bridge connecting the two protocols and unlocks a diversity of use cases for users to earn more DeFi yields.
    When you supply USX and borrow from dForce, you will be incentivized with DF token (click here to see gauge). Also, USX minting fee on Liqee is 1.5% APY, which is a generous offer compared to 3.0% APY on dForce – this is a strong demonstration of solid partnership between Liqee and dForce.