Nexus Covered Vaults (Development Phase)

Governance Discussions Nexus Mutual DAO Proposals
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Summary

We propose to develop an ERC-4626 compliant vault that takes an existing ERC-4626 compliant vault (e.g. Yearn) and purchases Nexus Mutual coverage on behalf of all users.

A previous funding grant allowed us to design a complete solution along with Nexus experts. This design has been reviewed, updated and approved so it can now move to implementation and testing.

View previous phase proposal here:

Motivation

  1. Purchasing and managing coverage on an ongoing basis can be cumbersome due to the need to roll-over and/or change coverage amounts.
  2. Gas for cover purchases effectively means it’s not economically viable for smaller users.
  3. Bundled products have much higher take-up rates due to the reduced user friction.

Project Description

To minimize technical implementation risks for this project, we propose a step-by-step delivery approach including the following stages.

The current proposal will focus on Phase 2 and Phase 3: Development and testing of the complete smart-contract solution.

Phase 1: Scope definition & project planning (COMPLETED)

Phase 2: Iterative development

  • Solution architecture design
  • Sprint-based development according to the project plan.

Phase 3: User acceptance & transition

  • Pre-production core team acceptance testing
  • Help with smart contracts deployment
  • Deployment success assessment
  • Further development planning, if any

Goals

  1. Implement the designed solution.
  2. Write documentation.
  3. Test the solution.
  4. Collaborate with Nexus on deployment tasks.

Deliverables

  1. Open Source repository with all the code, scripts and documentation needed for deployment and configuration of new Nexus Covered Vaults.
  2. Test code.

Development Roadmap

This project should take between 8 and 11 weeks of work.

Budget

This budget includes 2 components: USDC + wNXM, transferred to a wallet to be informed reasonably prior to such payment.

  • 50,000 USDC (or other stable coin), to be paid in 2 installments:
    • 25,000 USDC as soon as the proposal is approved,
    • 25,000 USDC once the deliverables are presented for review.
  • 1450 wNXM to be paid once the deliverables are presented for review.

Resources

  • 1 Sr Solidity Engineer: 8-11 weeks
  • 1 SSr Solidity Engineer: 8-11 weeks
  • 1 Part-time Business Analyst: 8-11 weeks

NOTE: This is the same team that designed the solution.

Team

Contact Info

Website: https://www.bootnode.dev/

Email: [email protected]

Telegram: @leolower

Team Members

  • Leo Lower: Co-founder and CTO of BootNode
  • Gerardo Nardelli: Solidity engineer at BootNode

Relevant Experience

BootNode is a software engineering studio that specializes in decentralized infrastructure, protocols, applications, and ecosystems.

Founded by a team of engineers with an average of 10+ years of experience building and shipping highly available, highly-scalable software for many industries and 3+ years for the blockchain ecosystem in particular.

Our mission is to provide unique and scarce resources to organizations changing the future of humanity through decentralized technologies.

Our vision is to become an essential and critical partner that enables these organizations to fulfill their mission.

We have contributed to countless organizations developing their blockchain projects applications, from ideation to massive adoption, applying proven UI design to React dapps, from protocol and architecture design to Solidity smart-contracts, relayers, backends, subgraphs, and integrations. We work the full-stack and pay special attention to product development, not just application programming.

Our engineers have participated in some of the most popular DeFi platforms and this has exposed us to all the different money legos. We can help you build on top or integrate down to any of these protocols.

We have also successfully delivered these proposal to Nexus Mutual:

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Hey,

adding the previous proposal for context : Proposal: Nexus Covered Vaults (Discovery Phase)

Do you think possible at this stage to estimate the Development Roadmap & Budget for Phase 3?

If I understand correctly, if this proposal is accepted, there will be a Phase 3. I personnally feel a bit uncomfortable accepting without an idea of how much it’s gonna cost to complete the project. Without it, you could ask for an unreasonable amount for Phase 3 and Nexus would be in a bad spot : " either we wasted money on phase 1&2 or we spend this unreasonable amount for phase 3 " (Not saying it will happen here ofc, just a general comment :slight_smile:).

Cheers

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Yes, that is reasonable.
For context, here is the report generated as a result of the discovery phase, it includes some context about the implementation and timeline of the following phases: BootNode | Nexus Covered Vaults Discovery Report [20220812] - Google Docs

As for Phase 3, the first task ( Pre-production core team acceptance testing ) will be performed during development (phase 2) through continuous review of pull requests, instead of being done after we deliver the code. This approach has worked well on our previous engagements with Nexus. Some review and adjustments may be needed later as a result of Nexus v2 audit and deployment, but the majority of changes should arise during review.

The other 3 tasks ( Help with smart contracts deployment, Deployment success assessment, and Further development planning, if any ) can not be performed immediately because they depend on the deployment and release of Nexus v2. The first 2 should not require significant effort on our side so we are happy to include them as part of phase 2. If this assumption changes we will estimate the work and propose an additional engagement with the same base terms as this one, no increase in fees.

As for the last item: additional development as needed, it is not something we can asses at this moment because it depends on the future plans of the product. In any case, there is no “vendor lock-in”, the code and documentation will be released as open-source and any other developer or team can continue our work if the DAO prefers.

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Thanks!

Ok so no more worries on this front :slight_smile:

If the team is satisfied with phase 1, happy to vote yes!

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This topic was automatically closed 7 days after the last reply. New replies are no longer allowed.

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This proposal has been transitioned to a Snapshot vote to determine if members would like to provide BootNode with a grant for the next phase of the covered vaults project.

After an open comment, review period, the choices presented in the Snapshot vote are:

  • Approve grant request
  • Do not approve grant request

You can vote on the Snapshot proposal from 26 September at 11:30am EST / 3:30pm UTC to 1 October at 11:30am EST / 3:30pm UTC.

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What i wonder

  • has this been requested by protocols or users? is there demand for it, i remember armor and it didnt got that much adoption… although i would love this if say yearn, compound, aave etc would natively integrate insurance as a add-on button to their vaults…
  • why can’t we colab with armor shield vaults here, as they seem to already have implemented it before?
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Hello @vincentj, thank you for providing feedback on our proposal.
We actually discussed this topic with armor’s team, they even provided very relevant insights that we used during the discovery phase to create the best design possible. The discussion is here: Proposal: Nexus Covered Vaults (Discovery Phase) - #4 by robert

Robert mentioned that the only reason they stopped their work on coverage-wrapped tokens is because they migrated to a completely different model of Uninsurance.
Unfortunately we couldn’t use arShield’s code because we are targeting Nexus v2 and all previous implementations work with v1, but their ideas were taken into account.

As for demand, we envision a near future where mass adoption of DeFi requires better UX and security provided by default to newcomers who don’t know (and probably don’t care) about the intricacies of Yearn, Nexus or ERC-4626 compatible vaults. Once this protocol is integrated with enough vaults, users will have the option to purchase insured or uninsured vault shares, they will compare the expected returns and the risk profiles and will choose the one that fits them best. History and experience showed us that there’s people in the whole spectrum of risk/profit, and that the next wave after the early adopters needs better usability and lower risk.

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sounds good, i guess i’m more worried on what i’d call business development, if any of those bigger projects would be eager to adopt it? maybe @BraveNewDeFi @Gauthier have a sense?

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Yes, there is a demand for this. I spoke with several teams in Berlin who have ERC-4626 vaults or are developing 4626 vaults, and there is considerable interest.

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thats awesome to hear!!