Should GnosisDAO fork and integrate the Maker D3M into Agave to generate an additional revenue stream?

General Gnosis Chain
1

What is the D3M?

The Direct Deposit Module (D3M) allows the Maker ecosystem to interact with third-party lending pools, such as Aave. The DssDirectDepositAaveDai smart contract is used to transfer DAI tokens from Maker to Aave’s lending pool, and its goal is to keep the maximum variable interest rate for borrowing below a targeted rate set by Maker governance. This is achieved by depositing or withdrawing DAI from the pool as needed. The DssDirectDepositAaveDai operates on a special ilk, which allows it to generate DAI tokens without traditional collateral, and it is backed by aDAI (an interest-bearing token in Aave pegged to the value of DAI at 1:1 ratio) held by the contract. The Aave pool is fully trusted and any interest earned is transferred to the Vow contract.
→ D3M Audit Report by ChainSecurity

How could GnosisDAO and the Gnosis ecosystem benefit from a xD3M (D3M on Gnosis Chain)?

  1. Increased liquidity: The xD3M’s ability to automatically deposit and withdraw tokens from lending pools based on variable interest rates could help to increase liquidity in the Agave pools on Gnosis Chain.
  2. Better interest rate management: By limiting the maximum variable interest rate for borrowing, the xD3M could help to keep borrowing costs low for users, which could attract more users to Agave and increase demand for the platform and the Gnosis Chain as a whole.
  3. Improved governance: The xD3M’s reliance on Gnosis governance to set the targeted interest rate could help to align the interests of users and platform stakeholders.
  4. New use cases: With the integration of xD3M, Gnosis Chain would enable the use of a whole new set of use cases for lending and borrowing, that are not present in the current Agave protocol.
  5. Increased adoption: Integrating the xD3M into Agave would make it possible for users of the broader Gnosis ecosystem to also use Agave, which could help to increase adoption of Gnosis Chain as a whole.

How could GnosisDAO use the funds

  1. Ecosystem fund: The GnosisDAO could use the interest income to fund development and growth of the Gnosis Chain ecosystem. This could include funding for new projects (e.g. RocketPool integration on Gnosis Chain), developer grants, and marketing campaigns.
  2. Pay to validators: GnosisDAO could distribute the interest income as rewards to validators who secure the Gnosis Chain network and/or incentivize more people to setup validators (DAppNode programm).
  3. Community treasury: GnosisDAO could create a community treasury and use the interest income to fund proposals that align with the GnosisDAO’s mission and vision.
  4. Buy back and burn GNO: GnosisDAO could use the interest income to buy back and burn GNO, which would increase the price and therefore the security of the Gnosis Chain as a whole.
  • Yes, I like the idea.
  • No, I don’t like the idea (comment below).

0 voters

1 Like
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Gnosis often seeks to keep pace with Ethereum chain developments. Does Ethereum/Aave use xD3M?

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@DigitalConsultants The AAVE Dai Direkt Deposit Module (D3M) was developed by MakerDAO as far as I know. So there is no connection between the D3M and Ethereum chain developers. Another option would be to bring MakerDAO vaults to Gnosis Chain (could be their innovative test and playground). Atm MakerDAO and GnosisDAO have a partnership and work together - see the GNO vault that is used by GnosisDAO. If GnosisDAO is interested in such an income stream it would be the best to first get in contact with MakerDAO.

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I like the idea. In general, I’d like to see more Defi development on Gnosis. A fork of Beefy Finance or Yearn would be great.

2 Likes
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Hey @m3rlin5ky! Thanks for the post. I think this idea has merit.
At the moment, xDAI lending in Agave is incentivized with an actual negative borrowing interest rate. This means interest rate is not limiting borrowing.
Since that is the case, it is my opinion that resources and energy could be better used in other projects.
I feel we should keep it under our belt for a better timing.
Bringing Maker vaults to Gnosis Chain is another great idea, specially given DAI role in the chain and the CDPs the DAO has.

3 Likes