RFC - Begin accumulating CVX & Incentivizing the USDi 3Pool

Hey everyone, this is not a formal proposal but a request for comments/ discussion about utilizing treasury assets and income to begin accumulating CVX and ultimately incentivizing the USDi Curve 3Pool.

As a user of the protocol, I instantly swap USDi for USDC as there are far better yield opportunities. In large enough quantities, this will ultimately spike borrowing rates as USDC gets depleted from reserves which hurt or deters borrowing activity. Some may argue that higher rates mean more revenue for IP so it’s a win. But I think at its current size IP should focus on increasing protocol utilization and building up USDC reserves to stabilize borrowing rates, therefore, creating a friendlier borrowing environment for users.

One way to do this is to incentivize users to hold USDi once borrowed or even swap USDC for USDi simply because of USDi’s inherent advantages, but also its yield. This brings us to good ol’ CVX.

Given the rebasing nature of USDi and that there already exists a Curve pool, it makes the most sense to focus on veCRV/CVX instead of newer and cheaper alternatives like AURA/veBAL. There are a couple of strategies IP can utilize however we are restricted by the lack of IPT DEX liquidity:

  1. Begin accumulating CVX with a % (or all) DAO revenue. There is currently ~$9.1k USDi in the DAO’s treasury generated from revenue that can be used to purchase CVX. It’s not a lot but it’s a start. We can then lock and begin to vote solely for the USDi pool, or a combination of the USDi pool and maximizing bribe revenue to increase our CVX stack.
  2. Begin accumulating CRV and locking for veCRV. I haven’t run the number on the efficiency between CVX vs veCRV in recent times, however, we face the obvious tradeoff between sinking capital for 4 years vs shorter term locks.
  3. An alternative but arguably a lot more expensive in the long term is to park our ~$9.1k USDi into the Curve pool and bribe veCRV/CVX voters with IPT and receive CRV emissions. However, B4B is likely diminished as its socialized over the whole pool.
  4. (Future option) once IPT DEX liquidity improves we could sell a portion of the IPT in the DAO’s treasury to purchase CVX.
  5. Partnering with Yearn, Ohm, BTRFLY etc. to receive a % of voting power for a certain period of time. This would likely come at the cost of IPT.

I really think that if we can begin offering a decent yield via Convex/Curve we should see a lot more borrowing and holding of USDi. In the meantime, we should continue focusing on listing yield-bearing assets (e.g. rETH, some interesting yet riskier alternatives are icETH, iETH etc.)

While I know this post lacks a deep dive into the data of which strategy is most efficient. I’d love to hear thoughts from everyone regarding this as a near-time drive and long-term strategy for IPT!