Guardian Setup for LlamaRisk crvUSD Vault
Summary
We are implementing a new guardian setup for the LlamaRisk crvUSD vault, leveraging Aragon technology. As a reminder, this vault consists of Convex-wrapped Curve LP positions / crvUSD lending market pairs.
The setup aims to enhance transparency, decentralization, and trustlessness for the vault depositors. The depositors will be granted the ability to veto proposed changes to the vault’s strategy before implementation. In this way, they have a direct say in significant modifications that could affect their funds.
The key elements include a transition to an on-chain Aragon DAO as the guardian, a 1-day voting period for revoking proposals, and an increase to a 2-day timelock for the vault.
Context
Following the initial launch of our crvUSD vault, we recognized the need to optimize organic yield streams for depositors while ensuring their ability to influence vault modifications. Inspired by the Steakhouse’s model, we are implementing a similar guardian setup developed by Aragon to enhance user protection and participation.
Aragon is a pioneer in DAO technology, providing full-stack solutions for on-chain governance of protocols and assets. Since launching the first DAO framework in 2017, Aragon has facilitated the creation of over 7,500 DAOs, managing over $41 billion in value for prominent projects like Lido, Decentraland, and API3.
Aragon OSx is a modular DAO framework enabling developers to build, deploy, and evolve custom DAOs on-chain. It uses a plugin-based architecture for governance logic, allowing for flexible and granular designs that can be easily modified over time through the DAO’s governance process.
Aragon App is a user-friendly, no-code frontend interface that democratizes DAO creation and management. It allows users to launch DAOs, mint tokens, and govern wallet or ERC20 token-based DAOs entirely on-chain without requiring technical expertise.
Guardian Setup
The guardian implementation is achieved through an Aragon DAO, empowering vault depositors to vote on revoking proposals. Participants can engage by visiting the DAO page, where they can wrap their llama-crvUSD tokens to create or vote on proposals. The voting period is set to one day, balancing responsiveness with decision-making efficiency. Token wrapping is required for participation, but the Aragon UI simplifies this process. Users can unwrap their tokens at any time, maintaining liquidity flexibility.
Source: Aragon, Jul 29th, 2024
Source: Aragon, Jul 29th, 2024
Guardian
Only a single address can have this role.
Capabilities:
- Can revoke a pending timelock decrease until the previous timelock ends and the new timelock is accepted (by the Owner).
- Can revoke a pending guardian until the timelock ends and the new guardian is accepted (by the Owner).
- Can revoke each pending market cap increase until the timelock ends and the new market cap is accepted (by the Owner or the Curator).
- In particular, it cannot revoke a pending fee (submitted by the Owner).
Source: Roles & Capabilities | Morpho
We have implemented a 2-day timelock for the vault, increasing it from the previous 1-day period. This timelock applies to significant changes such as adding, removing, or updating markets, as well as modifying the guardian or the timelock period itself.
Implementation Process
To enhance the security and immutability of the guardian set up, we have implemented additional technical safeguards by revoking several critical permissions:
UPDATE_VOTING_SETTINGS_PERMISSION_ID: This revocation removes the DAO’s ability to update its own settings, preventing potential manipulation of voting parameters.ROOT_PERMISSION_ID on the DAO: By revoking this, we eliminate the possibility of the DAO granting itself theUPDATE_VOTING_SETTINGS_PERMISSION_IDagain, further solidifying the immutability of the setup.UPGRADE_PLUGIN_PERMISSION_IDandUPGRADE_DAO_PERMISSION_ID: These revocations prevent any upgrades to the voting contract or the main DAO contract, respectively. This ensures that the core functionality and rules of the guardian cannot be altered without going through the proper channels.
These technical measures create a robust, tamper-resistant guardian structure that users can trust to remain consistent over time. The immutability of these settings means that any future changes would require a complete redeployment of the guardian, which would be subject to the 2-day timelock, giving depositors sufficient time to react.
Future Developments
Aragon is currently developing a refined governance system specifically tailored for dual governance structures. Their new mechanism promises several improvements: elimination of token wrapping requirements, streamlining user participation; a unified, user-friendly interface for all governance actions; and fully on-chain implementation, maintaining trustlessness and transparency.
We are working closely with Aragon to create a custom solution for prompt, on-chain user notifications. This system will offer real-time updates on important vault activities and governance proposals, in-app notifications and disclaimers for users to review, and consent mechanisms through gasless transactions, reducing barriers to user engagement.
Conclusion
By leveraging Aragon’s battle-tested DAO technology and incorporating lessons learned from other successful projects in the space, we aim to provide a governance structure that is both powerful and user-friendly.
The new guardian setup for the LlamaRisk crvUSD vault represents a significant advancement in our commitment to decentralization and user protection. The implementation of Aragon-based solution with carefully considered parameters and technical safeguards, provides the depositors with enhanced control and security over their assets.
We encourage all vault users to familiarize themselves with the Aragon DAO interface and actively participate in the governance process when necessary. Your engagement is crucial in maintaining the health and direction of the vault.