Emergency proposal: Abracadabra request for help
Our industry was plunged into turmoil this month with the collapse of FTX, showcasing the importance of decentralised finance. The permissionless nature of our industry poses challenges which every defi protocol is tackling every day.
Today, the Abracadabra Protocol is reaching out to you, in order to tackle a challenge and safeguard our users’ assets. It has come to our attention that two collateral positions that reside on Sushi’s Bentobox infrastructure are at risk.
Since the Bentobox infrastructure is controlled by Sushi, we are asking the community to help a fellow defi project resolve this issue in a swift and secure manner.
We are hoping to increase the interest rates on two of our deprecated cauldrons with a TVL of $10M that currently reside on Bentobox, the cvxRenCrv (0xB65eDE134521F0EFD4E943c835F450137dC6E83e) and yvcrvstETH (0xdCD90C7f6324cfa40d7169ef80b12031770B4325) cauldrons:
- 0x35a0Dd182E4bCa59d5931eae13D0A2332fA30321
- 0x0BCa8ebcB26502b013493Bf8fE53aA2B1ED401C1
Both of these tokens are not used in any way on sushiswap, and they are in one case a wrapper made specifically for abracadabra, and in the second case a yearn interest bearing token.
For the yvcrvstETH cauldrons, a faulty oracle poses a threat to users who have open positions.
For cvxRenCrv, the recent developments on the deprecation of Ren Bridge v1 make us uncertain on what the best path forward is with this kind of collateral.
Multiple other protocols have already begun discontinuing their renBTC markets:
Official Ren protocol Announcement:
-https://twitter.com/renprotocol/status/1595807696296751104?s=20&t=CtuQNjzFb0myRRgPDYDhYg
MakerDAO Announcement:
-https://twitter.com/MakerDAO/status/1595811489985748993?s=20&t=CtuQNjzFb0myRRgPDYDhYg
BadgerDAO:
-https://twitter.com/BadgerDAO/status/1593315230410481665?s=20&t=sggRkIBlSFnb_ey64JRhxQ
The Abracadabra design does not have the power to forcefully close an open position for any reason. What we can do however, is increase the interest rate to incentivise users to do so, which means that these users will pay the protocol for the risk exposure their position is creating.
We have also encouraged our users to close their position in said market here.
Why we need Sushi’s help
Over one year ago, we built the Abracadabra lending infrastructure on Bentobox because we believed in the ethos and vision outlined by Boring. Therefore, in order for our team to be able to raise the interest rates, we need to have approval from the multisig that owns Bentobox.
For these two cauldrons, the owner is the Sushiswap team.
As an added incentive to grant us this approval, we propose to share 35% of all the revenue that will be produced by these strategies with xSUSHI holders. This basically turns $10M of TVL that is sitting idle on Bentobox into productive assets for SUSHI holders while at the same time reducing Abracadabra’s risk exposure.
These two assets pose a threat to the Abracadabra protocol stability and we are reaching out to the Sushi community to help us fix these two collaterals at risk.
We have already written the code changes necessary to raise the rates and these changes have already been technically vetted by members of the Sushiswap team.
The strategy contracts can be found here:
- 0xc1DBac8eb17F3684BF87847CD9525dFbCd9a4033
- 0x0eC271d3bDb1A723088d1DCef6B7ebf9C1b0d377
A similar implementation of this code is being pushed on our own infrastructure if this proposal was to pass.
We have also checked in with the Sushiswap tech team, who has confirmed that the contracts we are using are safe. We are happy to have a third party look over these contracts as well, to make sure they fulfil their roles.
Why is there the need for an Emergency Vote to be activated ASAP:
As mentioned above, we are asking for this vote to be speedlaned because of how quickly the situation has been evolving following FTX collapse, as well as the vulnerability in the other yvcrvstETH market.
We would like to avoid sharing too much information on that, as it may pose a risk to our users.
Historically, the Abracadabra team has always thought of Sushiswap as one of our best partners. As such, Abracadabra has always used Sushiswap as the main source for many of our pools, including ETH-SPELL liquidity, on multiple chains.
We are now asking you all to vote and help us protect our users, SPELL holders, and the overall stability of our protocol. In doing so, we are also happy to share the possible revenues that are coming out of this unfortunate situation with the xSUSHI holders.
