Joint LM with Jarvis Network, for incentivizing Forex pools

Hello :slightly_smiling_face:

My name is Pascal, and I am working at Jarvis Network. After having discussed with some team members from Kyber, I am writing down my first proposal which is a bit more unconventional than the other one, due to our reward mechanism, and because it concerns 3 pools.

I am happy to start a discussion here and to answer to any questions you may have.

1. Project Introduction

Jarvis Network is a set of DeFi protocols to make DeFi more accessible. Synthereum is our first protocol. It allows the issuance and exchange without slippage of synthetic fiat currencies (aka jFIAT) like jEUR, jCHF or jGBP. It is live on Ethereum and Polygon.

The jFIATs are backed by USDC, with a collateral ratio of 125% and a liquidation threshold set at 105%. They are integrated in a 0-fee fiat on and off-ramp on both networks. They can be exchanged without slippage for USDC or for any other jFIAT on the Jarvis Exchange, leveraging from the minting and burning mechanism of the protocol: when a user wants to buy jFIAT, a liquidity pool holding USDC mints and sells them in the same transaction, at the Chainlink price feed; when a user wants to sell jFIAT, a liquidity pool buys them back and burn them to redeem their collateral in USDC.

From an end-user point of view, they buy or sell jFIAT without slippage. Thanks to this design, traders can perform arbitrage between this primary market and secondary markets such as AMMs, in order to maintain a strong peg.

2. Proposal Summary, Motivation and Key Details

Jarvis Network is proposing a joint liquidity mining program with Kyber to help improve liquidity for the jFIATs token on KyberDMM protocol, and request to receive the KNC token upfront to add them to our LM contract.

During the campaign period, liquidity providers who add liquidity on the eligible jEUR-USDC, jGBP-USDC and jCHF-USDC amplified liquidity pools will receive LP tokens that can be staked on the yield page, and/or on our own Yield application, for additional JRT, UMA and KNC token rewards, depending on the outcome of the vote.

The rewards will be distributed through our own AUR token. The latter will be listed on KyberDMM against USDC (we will incentivise the pool ourselves). AUR tokens are representing other tokens locked in a smart contract, called the “reserve”. LPs receive AUR tokens and have the choice to sell them right now, or wait until the end of the 8 weeks program to unlock the JRT, UMA and KNC held in the reserve contract, by burning AUR. The reserve contract is seeded by Jarvis Network; this is why we would like to receive the KNC token in advance, in order to deposit them in the reserve contract, and to use our UI, built around the concept of the AUR token.

In the case this request will be rejected and the joint LM program will be approved, the AUR token will only hold JRT and UMA, and LPs would earn KNC and AUR tokens.

However, mind that using AUR tokens has few interesting consequences:

  1. It reduces the selling pressure of the underlying tokens; most likely, LPs with a short term strategy will dump their AUR tokens, without impacting the underlying JRT, UMA and KNC, and LPs who want to keep their tokens will keep their AUR tokens to exchange them at the end of the program for the underlying tokens.
  2. It introduces some game mechanics: if the price of the AUR token is below what traders think it will be at the end of the incentive period, they could buy it. If the tokens are oversold, this could constitute a nice opportunity to medium term traders.
  3. The admin of the AUR token can add more tokens during the program; for example, the more the TVL of Synthereum grows, the more UMA will be added, which will have a positive impact on the APR.

As part of the campaign launch, there will also be joint marketing efforts with Kyber Network.

Jarvis Network is an ideal candidate for Rainmaker Liquidity Mining on KyberDMM. We expect constant arbitrage opportunities between Jarvis Exchange, which uses Chainlink price feed, and KyberDMM, which will generate trading fees. Jarvis Network’s jFIAT have a direct fiat on and off-ramp on Polygon, to help to buy or sell jFIAT in order to participate in the program.

Jarvis Network will provide liquidity on a new amplified jEUR-USDC, jGBP-USDC and jCHF-USDC pool on KyberDMM, as well as amplified liquidity for the AUR-USDC pool. Together with requested KNC rewards, total incentives exceed the minimum requirement of $200,000.

3. KNC amount requested

77,000 KNC ($150,000, $50,000 per pool)

4. Amount of tokens project is contributing

1,200,000 JRT + 6,000 UMA ($200,000)

5. Network

Polygon

6. Token pair option

USDC

7. Vesting

No, if the KNC tokens could be given upfront to Jarvis Network. Yes, 14 days if the upfront payment is refused.

8. Campaign start date and duration

Starts 15th of September, lasts for 8 weeks

9. Project Details

8 Likes

Great to see! Would be a perfect fit to utilize the Amp, and great timing as current rainmaker rewards on Polygon are about to end, so hope we can see that live soon!

The AUR Tokens are a very interesting approach, would get my ‘yes’ vote.

2 Likes

Jarvis appears to be a fairly new and niche project with a small community but it has an advanced and promising product. A joint campaign with kyber will probably bring them a lot of exposure so they should be providing closer to $300,000 in rewards instead. i’ll support the proposal if more JRT or UMA rewards are given. it’d be good to have Kyber and Jarvis work together on a joint campaign.

4 Likes

Thanks Tom.

I will forward this feedback to our governance to see what can be done here.

I cannot edit my initial post so I will add more details here.

I did not mention the risks born by our synthetic assets.

  1. Being collateralized by USDC, these assets are not as decentralized as our protocol; bear in mind that Circle can freeze the USDC of any address; not sure how does it work on Polygon though (if it is a wrapper of the Ethereum token or a native one with similar features); one way to mitigate this issue will be to replace, at some point, USDC by aUSDC, somehow using Aave as a proxy.

  2. Synthetic assets bear technical risks and can become under-collateralized and under-capitalized. This happen when the value of the collateral backing the synth is below the value of the synth. This causes the value of the synth to drop and can create a big sell-off on the DMM, which could push the price below the range created by the amplification. In that case, LP would only have the synth left in their position. The collateral being USDC and the synth being EUR, CHF and GBP, these risks are little, yet they exist. In order to be under-capitalized, these currencies should gain at least 25% against USD.

  3. Not to mention also the other risks: our protocol, Chainlink, failed liquidation etc.

I also would like to stress on the fact that we ask the governance to give to Jarvis the KNC rewards upfront, to include them in our AUR contract; it means that the UI of the yield page will only show a reward in AUR; we will work on integrating the Kyber staking contract within our own UI. This would ease the user experience and our work with our yield app.

4 Likes

Interesting to have Forex on Kyber! I will vote yes. maybe reduce the KNC or increase the AUR component to be comparable with other recent proposals submitted, since that will give this proposal a higher chance of approval during the DAO vote. Should also set up liquidity pools on Ethereum not just Polygon?

2 Likes

This is an interesting proposal. Pascalus is upfront about risks which is greatly appreciated for the community to make an informed decision instead of saying yes simply because its a liquidity mining project.
A collaboration with Jarvis Network does have potential but as tomaave says they are fairly new so there’s a lot of uncertainty. The ecosystem fund is not unlimited and recently there has been many joint LM proposals so maybe it would be better to err on the side of caution.
I agree it would be helpful for Jarvis to receive the KNC rewards upfront, however I strongly feel there should be some immediate benefit for KNC holders. As such, I think 1 of the eligible pools should be a KNC pool so we can immediately add our KNC rewards as liquidity. If this is not possible, then the amount of tokens contributed should be higher.

Hello Lianne,

I have shared with our community the feedback about increasing the rewards on our side to match 2x the requested KNC’s value. If we do so, maybe increasing the period from 8 to 12 weeks could make sense but I have to run a simulation.

As for the KNC pair, the KNC would be locked and not distributed before the end of the 8 weeks so you won’t be able to reinvest the KNC beforehand. Also, the point of pools on an AMM is to provide user with Fx Index which auto-rebalance to allow a specific use case: long/short reduced risk trading. So we need to have the counterparty in usdc

Hey defiwarrior. I will propose to increase the rewards on our side.

The plan is to only do it on Polygon. Ethereum gas fee makes the arbitrages impossible and the whole point here is to generate constant arb and therefore fees.

1 Like

Very happy to see this proposal, I can see the proposer’s detailed introduction, no doubt this will help Kyber development, but there should be more motivation to support this proposal, it would be great if the award could be increased a little bit!

It’s great that innovative, different projects are interested with Kyber. You can review Jarvis’ website; https://jarvis.network/ is nicely designed to look at the structures, team members, and tokens it has.

1 Like

Hi, I was interested that 3 pools will be opened. These are better for both the project team and Kyber! I like to see multiple pools but I hadn’t heard of this token before, it just sounded unfamiliar. Supporting new projects is good, but Kyber has a lot of credibilities, so I think projects should be chosen carefully.
The presentation style of the proposal is also amateurish in my opinion, I am hesitant about this project.

Hey BitcoinIn,

Every project is new, at some point :slight_smile: However, we are not that new, we are more known in the french speaking crypto community, and we have been working on the project since 2019. We are an approved forked of UMA, so we are supported by them and this is why we are receiving UMA tokens that we can then redistribute in such programs. Myself I have been very active in DeFi France and one of the recurrent speaker together with Julien (StakeDAO, Curve), Marc (Aave), Mounir (Paraswap) etc. and I also have a +40k french speaking trader YouTube channel.

About the project, we do not have traction yet because there are still some features we want to ship before to accelerate our marketing effort, but we are getting there. We already did the most difficult: having a fiat ON and OFF ramp, for our synthetic asset.

You can ask questions about us and the project here to clear any hesitation you may have.

2 Likes

Thank you! I will do more research :pray:

1 Like

Happy to see this thread and be here as an ambassador of the SuperUMAns. As Jarvis is a fork of UMA, it’s an honor to reach out and support this integration.

Good to see that Jarvis has been able to meet the Kyber community’s request to add more collateral, as well as see the positive sentiment all around. Will be following and happy to help in any way possible.

1 Like

Great to see this proposal. We really need more non-USD fiat currencies on Ethereum and its especially cool to see Jarvis implement a non-slippage model for these. I can’t see anything in the proposal that raises any red flags and Pascal has been super-responsiveness to address member’s concerns so kudos to him.

Someone commented that Jarvis appears to be a fairly new project and I just wanted to mention I’ve known Pascal for a few years now and we’ve also been on a number of DeFi panels together and I highly value his opinions and all the work he’s done with Jarvis over this time. I think Jarvis would make a great addition to the Kyber ecosystem.

4 Likes

Hello everyone :slight_smile:
I made a proposal to our governance to increase the number of JRT distributed. The vote will finish on sunday.

1 Like

Hey everyone :slight_smile:

Our vote (to vote for the budget) ends tomorrow and it looks like it will be a yes.

Here are the update on the proposal:

  • Requested: 77k KNC (around 140k USD)
  • We contribute with 8,670 UMA tokens (around $100k) + 2,857,000 JRT (around $200k);
  • Duration of 8 weeks;
  • Rewarding the amplified FX pools and AUR pool :slight_smile:
1 Like

Great news! This should bring considerable traction to both Jarvis and Kyber. Glad to have the opportunity to work with Pascal and a professional team like Jarvis and I will be supporting this proposal in the next Kyber.org vote :+1: