Summary
In context of the recent shortfall across all of Euler’s markets (For more information, see our post mortem: https://swivel.substack.com/p/post-mortem-euler-liquidation-vulnerability we have both lost a non-insignificant amount of liquidity and are faced with the need to launch with a new integration partner.
Luckily the protocol is well prepared for various integrations, and we have the options of:
- Yearn
- Aave (v2)
- Compound (v2)
- EIP-4626
- Rari (Deprecated)
- Euler (Deprecated)
As far as EIP-4626 markets go, the two largest ones seem to be:
- Morpho
- Fraxlend (only FRAX)
I will shortly be putting up a vote for the community to identify the ideal integration partner. For the additional context that may be necessary, I will be including some brief context about each protocol below:
Aave (v2):
Current APY: 1.06%
Current TVL: $838m
Aave offers a “safe” solution that has been battle tested for years (and the highest TVL). With this has come superfluous deposits that tend to sit in Aave regardless of the current rates – activity that may be negative while rates are low but positive while rates are high.
Compound (v2)
Current APY: 2.68% + 0.84% COMP
Current TVL: $424.54M
Compound offers a similarly “safe” solution that has been around the longest in DeFi. Compound seems to offer a competitive APY while also offering additional COMP rewards that may buffer the Swivel DAO treasury over time.
Yearn
Current APY: 2.82%
Current TVL: $27m
Yearn offers an aggregated yield source that will generally “always” be competitive with the market, assuming the market doesnt crunch completely (and the yearn fee eclipses what they can offer as an aggregator). Further, as an aggregator Yearn also diversifies their yield origination sources which may be of relevance in context of the recent Euler hack (e.g. Yearn was exposed to Euler but only ~2m if I remember correctly)
Morpho (Compound)
Current APY: 2.77% + .77% COMP + 140 MORPH / 1000 USDC
Current TVL: $7.14m
Morpho generally always offers equivalent or higher APYs compared to Compound given their P2P layer can offer slight optimization. There is also the additional MORPH tokens which may be of value at some point as well. The downside is if there is little P2P activity, we are taking on the risk of the Morpho layer purely for the MORPH tokens.
Proposal
With the context provided above, we are asking the community to identify our ideal stablecoin integration partner (for now), for our immediate USDC market launch.
Voting
Your options will be:
- Yearn
- Compound (v2)
- Aave (v2)
- Morpho
Who is the ideal partner for our immediate USDC market launch? Leave your thoughts below and/or in our discord, and vote at vote.swivel.finance