Proposal to deploy BOB on Gnosis Chain

General Gnosis Chain
1

We would like to propose the deployment of BOB stablecoin on Gnosis. Gnosis is continuing to grow and attracting unique integrations such as the recent one with SaltPay, but it is still lacking in what has become the essential core for all various L1s and Rollups - DeFi.

BOB is a multi-chain & multi-collateral stablecoin enhanced with optional privacy. BOB’s unique makeup and accompanying feature set (described below) are designed to bring more users, liquidity, and volume to any EVM chain.

The BOB token is currently live on 4 different networks - Polygon, ETH mainnet, BNB Chain, and Optimism, and on each chain BOB has increased the usage of various DeFi protocols. This is achieved through carefully choosing the pairs and protocols which are popular among traders and by working closely with these DeFi protocols to optimize strategies and attract users.

BOB’s current market cap is $18.5 million and its current daily volume is $11.5 million. For comparison, the GNO token market cap is over 300 million with a daily volume of around $2 million. A small fraction of this volume is happening on the Gnosis chain. Comparing BOB to the MAI stablecoin, MAI has a market cap of over $44 million but a daily volume of just above $2 million. BOB’s capital utilization is also significantly higher relative to other stablecoins such as DAI or FRAX.*

On Polygon, BOB’s home base, the token is currently among the top 5 tokens in trading volume on all major exchanges on the chain - Uniswap, KyberSwap, and QuickSwap.*

There is no need for any bridge when deploying BOB — the token is deployed directly to each chain. If this idea is well received by the Gnosis community, we would like to deploy not only BOB but several additional tools to complement the ecosystem. These include:

  • BobSwap, a headless AMM which is already live on Polygon.
  • BOB CDP, a new way to mint BOB tokens for which GNO would be added as one of the collaterals.

These additional tools are vital to BOB’s growth and adoption on Gnosis. The BobSwap can integrate with protocols such as 1inch exchange to provide pure 1X1 swaps with other stablecoins, providing no-loss stablecoin swaps.

The BOB CDP module introduces BOB stablecoin minting for public users with approved collateral.

The BOB team will deploy and set up these tools. However, once they are functioning optimally, Gnosis will assume control of the protocol and be responsible for any further decisions regarding direction, management, usage, etc. This is similar to a franchise model, and while relatively new to DeFi it has been successfully employed by projects such as Shard Labs which brought Lido to the Polygon ecosystem. Lido for Polygon - Proposal by Shard Labs - Proposals - Lido Governance

To incentivize franchising BOB to Gnosis, we propose a 30/70 revenue split between the BOB Protocol (30%) and Gnosis (70%). Ongoing revenue collected from the protocol can include:

  • BobSwap swap fees. Fee breakdown HERE.

  • BobSwap compounding fees. BobSwap has the ability to compound the underlying stable assets in Aave. If this functionality is enabled for the BobSwap on Gnosis, rewards from this activity will follow the proposed revenue split.

  • Inventory pairs swap fees. Inventory pair of BOB/WXDAI will be set up on Gnosis. Details about BOB inventory positions are available HERE.

  • Liquidation fees from BOB CDP (once available in Q2 2023)

  • Stability fees from BOB CDP (once available in Q2 2023)

  • Bridge fees for BOB

  • One voting seat in BOB Governance Board for the representative from the Gnosis team.

In return, we would request regular marketing support from Gnosis and a commitment to put at least $700K in liquidity into the BOB/GNO pool on Uniswap v3 (or protocol with similar functionality like e.g. KyberSwap) on the Gnosis chain and keep this liquidity in the pool for at least 1 year. Bob Protocol team will provide an additional $300K of liquidity into the same BOB/GNO pool with the commitment to keep it there for 1 year.

If BOB is deployed to Gnosis we intend to start replicating our successful playbook of bringing more liquidity and volume to the ecosystem through the use of BOB. We will also closely work with various protocols already live on the chain whom we already know very well.

All statistics are per February 6, 2023.

  • Yay
  • Nay

0 voters

13 Likes
2

Very cool. Let’s hope this passes. BOB on Gnosischain would be a great fit, for many reasons. :wink:

For what it’s worth, I don’t think either Uniswap or KyberSwap are deployed on Gnosischain? Uniswap had a successful proposal to deploy v3 on Gnosischain ages ago, but nothing happened.

2 Likes
3

Although I like $BOB very much and use the privat tx inside zkBOB and also use $BOB for other purposes on polygon, I am not quite sure about the value on other chains were there isn’t a direct interface to upload to a zkBob account. Instead I can use any other asset that can be bridged and traded on polygon for $BOB.

This might become different when BOB CDP is available, curious to see the details. But would appreciate a connection to zkBOB on gnosis chain even more (although I am not sure if it might be technical possible to attach it to more than one chain).

3 Likes
4

After deploying any of the protocols, BOB liquidity can be provided for inventory pairs. In the meantime, liquidity can be provided through BobSwap aka BobVault (Read more about liquidity seeding into BobVault zkBob )

I am not quite sure about the value on other chains were there isn’t a direct interface to upload to a zkBob accoun

While zkBob can be included in the proposal as a deployment on Gnosis Chain, it’s currently not included because there’s no revenue sharing model for it. This is because zkBob doesn’t generate revenue due to compliance reasons. However, it’s still possible to deploy zkBob as part of the proposal.

This might become different when BOB CDP is available, curious to see the details.

The BOB CDP is scheduled to launch in Q2 2023 and will complement the previously launched BOB Stable, BobVault, and zkBob products.

4 Likes
5

Personally I would appreciate this very much. Would this be a completely separate deployment or will it be possible to connect from one zkBOB account to either chain? And if it’s separate, would it still be possible to use from one browser instance both deployments without recreation of the account every time I change?

2 Likes
6

The deployment of the zkBob app will be separate and will encompass several services and component parts, such as:

  • smart contracts for the pool
  • a sequencer service that facilitates transactions from users to the pool and provides gasless interactions
  • a web and mobile-based user interface
  • an alternative web and mobile-based burner wallet-style user interface for redeeming ZK gift cards
  • an API service for the zkBob Cloud to use in hackathons and composability with other protocols
  • an AML screening service

And if it’s separate, would it still be possible to use from one browser instance both deployments without recreation of the account every time I change

The same private key can be used for both deployments, and the generated ZK addresses will work across both deployments. Additionally, we plan to create a way to generate ZK addresses that are specific to a particular deployment, for deposit purposes only.

4 Likes
7

Can you add a poll to this proposal?

8

Appreciate the suggestion. Could you recommend poll options to include? “yay/nay” ?

2 Likes
9

If you’d like put this post into phase-2 then a poll will populate with the template GnosisDAO Governance Tutorial. How to participate | by Gnosis | GnosisDAO

Happy to help if you need any assistance just ping me!

5 Likes
10

Hey there! Always in favor of innovation and great products coming to Gnosis Chain!

Regarding the why, and going back to @refri’s comment, it would be helpful if the team could share some of the use cases for Bob before CDPs and zkBOB get implemented.
I understand Bobswap would be a very efficient swap mechanism between stables. Would the use case then be xDAI > BOB > GNO and/or in the other direction?

I see there is also a mention of the Bob playbook, and I wonder if there are more details the team would like to share about it that would translate in additional value for the chain.

One benefit for the DAO seems to also be the additional revenue stream coming from the shared fees. Is there any projection or scenarios to kind of quantify or estimate it? Also curious about the insights of the high volume seen in polygon (e.g. large fees apr on uni v3 WETH/BOB pool).

Regarding the how, is the proposal for the BOB/GNO liquidity to be non-custodial with a trust assumption for the liquidity to be allocated for the 1-year term? What is the proposed method to get native BOB in gnosis chain?

How would a BOB/GNO pool behave in BobSwap? Is there a bonding curve? Is it non-custodial?
I also see there is a reference to a XDAI/BOB pool. Will this inventory pair be implemented in Gnosis Chain separately from the BOB/GNO pool? Will this liquidity be added by the team, and how much?

(Thanks in advance for the patience in going thru my questions :pray: )

1 Like
11

My current view is that BobSwap is only for stables. That’s why the proposal suggests to create the BOB/GNO pool “on Uniswap v3 (or protocol with similar functionality like e.g. KyberSwap) on the Gnosis chain”.

12

it would be helpful if the team could share some of the use cases for Bob before CDPs and zkBOB get implemented

Sure enough, BOB supports all common use-cases one has for any other stablecoin of choice, including savings, payrolls, stable LPs, lending and borrowing, etc. Optional privacy achieved through zkBob and native minting of BOBs using various types of collateral would become awesome add-ons to all of that.

Would the use case then be xDAI > BOB > GNO and/or in the other direction?

Indeed, efficiency of BOB liquidity and BobSwap rates makes BOB a great choice for intermediary token in path optimizing algorithms at DEX aggregators. So far we have integrated BobSwap with 1inch, which already made a huge impact to organic volume on Polygon, as lots of orders of any size are now being routed through BOB. More DEX aggregators and integrations are coming soon.

How would a BOB/GNO pool behave in BobSwap?

For now BobSwap is primarily focused on stable-swaps. Native support for volatile pairs is on our research backlog.

Will this inventory pair be implemented in Gnosis Chain separately from the BOB/GNO pool? Will this liquidity be added by the team, and how much?

Inventory positions are separated from all other positions, thus it will be a separate protocol-owned LP. Inventory positions are minted by governance through one-side LP provision on Uni-V3 like protocols. You can read more about inventory management HERE

3 Likes
13

The BOB/GNO pair is not an “inventory” pair, but is instead funded by the treasuries of each protocol. As such, it does not require a non-custodial or trustless setup.

What is the proposed method to get native BOB in gnosis chain?

As part of the governance and seeding process for BobSwap liquidity, the BOB inventory will be pre-minted. Afterwards, each party will exchange WXDAI for BOB in order to fund the BOB/GNO pairs.

One benefit for the DAO seems to also be the additional revenue stream coming from the shared fees.

The shared revenue model for franchises is designed to align the interests of both parties.

Is there any projection or scenarios to kind of quantify or estimate it?

We can examine historical earnings for swap fees, LP fee and interest that has been compounded in AAVE. While we do not currently have a projection model, it is something we will consider exploring at a later time.

Also curious about the insights of the high volume seen in polygon (e.g. large fees apr on uni v3 WETH/BOB pool).

In order to generate volume in a volatile/stable pair such as WETH/BOB, several factors are important:

  • Providing pairs that allow BOB to be swapped for more commonly used stable coins such as USDC. Fortunately, this is often achieved through a pre-seeded inventory pair on the BOB side.
  • Having liquidity in WETH/USDC to facilitate organic arbitrage between pairs.
  • Offering low fees for the WETH/BOB pair.
  • Having a range management vault for Univ3-like AMMs, such as Gamma or Mellow protocol.
  • Organizing trading campaigns with AMMs, such as Kyber.
  • Offering farming opportunities for staked LP positions, as is done on Quickswap.

Although we are still learning, it is possible to create organic markets for high-quality, liquid assets such as top-tier volatile tokens and stable tokens.

Thanks in advance for the patience in going thru my questions

Thank you for your questions. They will assist us in improving the clarity of our product and ensuring that it is a better fit for the market.

4 Likes
14

Hello Igor,

On Polygon, the most active chain for BOB, $444k of liquidity exists;

On Ethereum, there is $245K of liquidity on Uniswap
https://info.uniswap.org/#/pools/0x3887e82dbdbe8ec6db44e6298a2d48af572a3b78

How did you go about determining that $700k of liquidity was necessary for GNO/BOB pair on Gnosis?

15

There are more liquid pairs for sure. E.g. on quite active BOB/WETH on Quickswap https://quickswap.exchange/#/pool/13706 2.014m and Uniswap v3 revert 1.632m, to name a few. You can find all the markets here https://www.coingecko.com/en/coins/bob.

How did you go about determining that $700k of liquidity was necessary for GNO/BOB pair on Gnosis?

There is no franchise on Polygon and liquidity is provided by external LPs. For the franchise model there are some terms and assumptions which are boosting deployment and make it more successful. The terms are negotiable.

4 Likes
16

These are great use cases.

In particular, my doubt is more around the timing. Until CDPs and zkBOB are in place, it feels like the fees from BobSwap would be limited to those trades that are not routed thru the existing stableswap AMM in curve or the already existing GNO pairs. Wouldn’t it make sense to hold until that’s in place to allocate the $700K - unless there is an estimation of the fees that would indicate otherwise. Is it a matter of “when”, rather than “if”?

1 Like
17

The proposal is forward-thinking, and we anticipate that liquidity provision will only be possible once Uniswapv3 or Kyber has been deployed. Unfortunately, at present, we do not have a solution to provide liquidity for BOB’s inventory in a one-sided pair. We are hopeful that major Automated Market Makers (AMMs) will be deployed on Gnosis, and that BOB CDP will be ready to be deployed soon after the launch of Uniswapv3 or Kyber.

3 Likes
18

A quick update from the BOB Protocol team:

  • We are preparing the zkBob pool for multichain deployment. The pool has been deployed on Optimism, and we plan to make corresponding changes to the UI next week.
  • In addition to deployment on Optimism, we plan to add an ETH pool there since it’s a native asset for the rollup, and it makes sense to experiment with different models. For the deployment on Gnosis Chain, a EURe pool can be deployed in addition to BOB as an experiment.
  • For new pools, we can introduce optional on-chain KYC via soulbound tokens from Know Your Cat ID with traits from Binance BAB and other providers. For Gnosis Chain, a use case with EURE pool withdrawal limit up to 1k EURO without KYC can make sense for upcoming crypto regulation in the EU. On the other hand, whitelisted vendors can have higher tiers.
  • The franchise model is becoming more popular in DeFi. A spin-off from Maker DAO, Spark Protocol, has a franchise from AAVE for a 10% royalty fee towards AAVE treasury with up to 100mm Dai minted limit, which will make it one of the largest franchise deals between a stable coin protocol and a lending protocol. Check out the proposal https://snapshot.org/#/aave.eth/proposal/0x15a031fa5f848aac269214a7cda2fed314590ab0c935b6879e4bf7fb9d87cc2c.
  • The CDP module in BOB is in beta and finalized for audit. You can check out the demo and walkthrough here. If deployed on Gnosis Chain, the CDP module will support BOB/WXDAI and BOB/GNO LP positions for borrowing BOB https://scribehow.com/shared/How_to_Mint_and_Repay_BOB_in_BOB_CDP__rLuCyOSPRgCDWR0ot4WrNQ.

We kindly request that you review the proposed idea once again and consider a potential partnership. Cheers.

7 Likes
19

Hey everyone, just a little update from the zkBob team, we have successfully launched the BOB CDP. You can try it now at https://cdp.zkbob.com/

1 Like