This past summer I learned how impactful high gas prices can be to small positions. At times, parts of my portfolio felt bricked by costs; not worth it to touch them. In addition, having so many small pools while interesting, felt draining. Farming in DeFi is reasonably attention heavy for being "passive" income.
Often migrations, upgrades, emergency votes are difficult to passively track. While depositing in longstanding lending protocols implied low maintenance deposits, the exploding farm sector requires far more interaction, reducing the efficiency of return. This also highlighted the expense to shave down my portfolio into a new asset. If I liked my distribution, and wanted to try something new, I had to choose which position to reduce rather than take a little from each.
This felt problematic to me. I wanted to consolidate, at least as far as having a buffer as a single point to grab funds when I need to readjust my experimental positions. I couldn't keep eating into my ETH, I like my Ether. At the same time, DeFi is collaborative and tokens hold unique properties that I wouldn't want to give up.
Enter PieDAO
Main Ingredients (What’s in a Pie)
Ethereum’s asset sector is vast, and it can be tough to keep up. PieDAO offers simplified exposure to a basket of assets in the form of their various Pies. Each Pie is made of a Pie Smart Pool governed by DOUGH holders. These are AMMs with additional functionality built on Balancer Smart Pools.
AMM’s are Automated Market Makers which manage a pool of assets on behalf of liquidity providers (LPs) and accept trades between the pooled assets at prices determined by a set price curve. When providing liquidity you receive tokens representing your share of the liquidity pool.
Each Pie represents a collection of tokens in a Pie Smart Pool. For instance the LP token USD++ represents the underlying assets USDC, TUSD, DAI, and sUSD, with varying weights allotted to each. This means holding USD++ gives you exposure to those assets in addition to yields from token swaps which route through the pool. Token exposure is naturally rebalanced by swaps and users entering or exiting the pool.
Garnishes (What can be added):
Every Pie is different, but here’s what can possibly make a Pie special:
Flashloans can be enabled allowing additional revenue. Dynamic Fees can allows the pool to influence trading and rebalancing frequencies helping capture larger gains from price movements. Dynamic Weights allow for time based weight adjustments to support assets with expiration dates, or better handle rebasing tokens. Safeguards like Halting Trading and Capped pools can offer additional protections.
Spices (What can be changed):
Pies have governable parameters representing swap fee, weights function, trading switch, flashloan fee, single asset entry/exit fee, pie management fee, cap value, and implementation address.
The DOUGH
DOUGH is the governance token of PieDAO. The recent migration to Doughv2 allows DOUGH holders to earn Pie fees, such as the current 0.7 streaming fee on some Pies. Each Pie has unique parameters which must be managed. Management of each Pie is delegated to PieDAO which passes the decisions to DOUGH holders.
In the near future there will be Meta Governance. Since Pies like DeFi++ contain governance tokens in their asset pool, DOUGH holders will be able to wield the voting power of these assets in their respective DAOs. Kinda makes DOUGH a governance passport. A singular token representing a wide array of influence as broad as its baskets. This is a massively innovative feature imo.
Fees charged to Pie Smart Pools accumulate in the DOUGH Vault, resulting in DOUGH also holding sway over a basket of assets which can be cashed out by burning DOUGH in a ragequit, or utilized by DOUGH holders as a treasury. There is even a proposal out to allow participants in governance to claim a share of fees as a reward for their engagement. This means DOUGH is backed by a diversified basket of assets, and has a way to fund development going forward already well baked into its design.
The BAL rewards in the treasury earned from Pies are being used for buybacks of DOUGH, further benefiting holders.
Moisture? (Does it Liquidity Mine?)
Does it ever! PieDAO keeps liquidity mining fresh baked, by providing a wide array of liquidity mining opportunities with a reward schedule set weekly. All of the below vaults are currently mining DOUGH through various incentive programs.
- The DEFI+S vault has rewards distributed over time for staking LP tokens of DEFI+S/ETH.
- The classic pool2 DOUGH/ETH vault has rewards distributed over time where 48% is escrowed for 52 weeks and 52% is liquid.
- The DEFI+L vault is a geyser where a length of deposit based multiplier affects your share of the drip for staking LP tokens of DEFI+S/ETH.
- The DEFI++ vault rewards are distributed over time subject to 52 weeks vesting from time of claim but staking DEFI++ alone.
- There's even L2 Mining on Loopring by actively trading these assets on the order book. This is really neat imo, because it allows you to mine by trading indexes.
As you can see, DOUGH mining is heavily experimenting with how to best incentivize participation while maintaining value. If you have any interest in distribution mechanics, definitely keep an eye on how this project continues to develop them.
What’s in the oven?
I certainly can’t encapsulate everything, but most notable is an ExperiPie on mainnet which is a new pool design based on the Diamond standard which provides a route for contracts to grow as needed with many facets. This would enable flexible strategy changes to utilize the base assets of each pie to farm yield. Imagine holding an index of various DeFi coins that finds the farming for you! Bless my lazy heart.
There's also a very interesting Dough Staking and Revenues proposal found here, and a proposal for a BTC/ETH/DEFI++ Pie here.
In Review:
I really like that meta-governance is baked into the vision of PieDAO, expanding its own governance value across a broad set of dApps. I think this will become a tremendous value add. I dig that farming has adapted to holder needs with increased vesting combined with utilizing BAL rewards for buybacks. This gave the price a great boost, and is a very good sign for holders. Asset backed with passive fee accumulation and decentralized governance feels DeFi native to me.
Now I'm spending less time following up on every little farm, and more time digging into things that interest me. Heck, I even found the time to write an article. I think I'll be sticking around.
Secrets of next release:
(oh look meta governance already here in part)
