I appreciate the response @Larry. I have added in a few comments as well as a new poll.
Aura Proposal Concerns
Minting Concerns:
On top of this, the engineering team has indicated that inclusion of this Aura plugin will increase gas costs of minting hyUSD by ~25%, with the engineering lift of the plugin being significantly higher than any of the other existing plugins. This is all suggests that we should seek another alternative.
Due to the fact that minting is going to cost an extra 25% in gas with the Aura pool accounted for, I do not think it would be wise to add it to the collateral basket. High Yield USD is relying on people to mint and adding in the extra minting cost might dissuade new potential minters of hyUSD.
APY Concerns:
A number of other links shared in Discord indicate uncertainty whether rewards will be streamed to this pool going forward.
It has been confirmed that there will be rewards streamed to the bb-a-USD pool on Aura after July 31st. However, these rewards/APY’s are currently unknown. Adding in the Balancer Boosted Aave USD pool on Aura could be beneficial in the future.
With the uncertainty in the APY and the added gas cost for the Aura plugin I think it’s best to find a better alternative.
Alternate Proposal - Morpho
New Proposal:
I propose replacing MIM-3CRV using Morpho’s Aave V2 lending optimizer. Specifically, I suggest using the USDT pool, which current provides 3.6% APR.
I second this proposal. As @Larry mentioned Morpho adds a peer-to-peer layer on top of Aave allowing lenders and borrowers to be matched more efficiently with better interest rates. When no matching opportunity exists, funds flow directly through to the underlying protocol(in this case Aave).
Security:
- Morpho has an excellent reputation for security
- Lending positions are presumptively less risky than LP positions for their greater simplicity (just a single asset)
Morpho has been live for over a year with audits completed by Pessimistic on July 25, 2022 as well as Spearbit on May 9, 2022 with several audits being completed in Beta.
Additional Considerations:
One of the potential drawbacks is that the yield is perhaps not as high as one may desire for a high-yielding flatcoin. This is a fair criticism. But on a balance, with the increased safety profile, and MORPHO rewards which will materialize some time in the future (which I expect to be relevant), this approach makes hyUSD stronger overall.
The apy will be lower in the beginning with the addition of Morpho, but hyUSD will have an increased safety profile. The lower apy will only be temporary as the added Morpho Rewards will be an addition to the 3.6% in the near future.
I have created a new poll below to gauge support from the community.
- Morpho Aave V2
- Balancer Boosted Aave V3 pool on Aura
- Leave MIM+3Crv