[1IP-05] Add Derivative Aggregation to 1inch Network

[1IP-05] Add Derivative Aggregation to 1inch Network


  • (Yes) In favor of this proposal.
  • (No) Against this proposal.

0 voters


Simple Summary

This proposal seeks to add derivative aggregation to the 1inch Protocol. Specifically, it calls for the following additions:

  • Aggregation protocol is expanded to include derivatives
  • Add derivative aggregation to the 1inch smart contracts, 1inch dApp, and 1inch API
  • The first derivative supported will be Opium’s TURBO products (call options)

Abstract

This proposal aims to signal to the 1inch Foundation that the DAO wants to add derivative aggregation to the 1inch Protocol – specifically, the 1inch smart contracts, the 1inch dApp, and the 1inch API. Adding derivative aggregation to the protocol will require technical effort from 1inch Labs, and will require the support of 1inch Foundation.

Motivation

1inch is currently the leading decentralized exchange aggregator and has made a reputation of providing the best prices on token swaps. With the rise of derivatives in the DeFi space, there is a new product niche that 1inch is perfectly positioned to capitalize on: the aggregation of derivative products.

By implementing this proposal, 1inch will solve the problem of fractured derivative liquidity (just like it previously solved fractured token liquidity).

Specification

This proposal serves as a signal from the 1inch Network DAO to the 1inch Foundation and 1inch Labs. Once passed, the 1inch Network DAO calls for the 1inch Foundation to allot resources to add derivative aggregation to the 1inch Protocol and dApp, and for 1inch Labs to add derivative aggregation to the 1inch smart contracts and 1inch API.

Opium’s TURBO product is a short-dated call option:

  • Community / users can “write” covered calls by pooling their tokens in order to earn yield (collect call option premiums)
  • Takers (professional market makers) can buy the call options in order to gain leveraged exposure to the underlying asset

Adding Opium’s TURBO options to the aggregation UI will require coordination with the Opium community to ensure a smooth integration.

Rationale

The architecture of the aggregation protocol has not yet been defined.

Opium’s TURBO product was chosen as the first derivative supported because the Opium community was offering to help with this integration via documentation and SDKs.

Considerations

The specifics of launching an aggregation protocol will not be defined until the 1inch Foundation supports the proposal. Like all new modules they have launched, a complete security review and audit should be performed before this change is implemented on mainnet.

Since all work described in this proposal will be organized by the 1inch Foundation, this will not cost any treasury funds.

6 Likes

Awesome, so glad to see this idea get formalized into a Phase-2 post. This would be a great addition to the Network!


Here’s the Phase-1 discussion:

Discussion proposal: expand utility for $1INCH token by leveraging OPIUM protocol

2 Likes

Great ! We can also put something similar with options too although that’s a bit far .

They also had a prototype in past for such Aggregation

1x.ag

I’d Vouch more if they include 1inch/st1inch tokens as collateral to borrow stable coins in this Aggregation Architecture . It’d make more sense & greatly enhance 1inch usecase .

1inch tokens should be used as collateral in Derivative Aggregation ?
  • :white_check_mark:
  • :x:

0 voters

2 Likes

Totally want it . & there’s a pretty solid reason i.e. both Makerdao and Aave didn’t passed Collateral Application of 1inch .

Really a shame for 1inch to be a massive project but can’t get into Big League Lendings . Ofcourse there are other ways lending 1inch but none of them are as secure as 1inch stands for .

I’m really sad to see this

1 Like

I’d Vouch more if they include 1inch/st1inch tokens as collateral to borrow stable coins in this Aggregation Architecture . It’d make more sense & greatly enhance 1inch usecase .

I like this, but I think derivative aggregation is a stand-alone idea (and the scope of proposals should be kept as narrow as possible).

So, the idea of using 1INCH as collateral would probably better suited as its own proposal assuming that 1IP-05 passes and is built out.


On that note, unless there is more feedback, I think this proposal is probably ready to move on to Phase-3 Temperature Check. If it passes the 5-day temperature check, then we can start the proper Snapshot Vote.

3 Likes

You’re right it can be another proposal but I think if 1inch Team is about open up the possibilities of such aggregation they should keep a place for 1inch token to fit into it as a last piece of puzzle . So that after they finish working on this project , integrating 1inch token to it is easy .
From a utility point of view its very necessary

Temp check will prolly pass successfully but i wonder if you’ll be able to pull of 10M quorum even tho this is a highly beneficial proposal imo but what will happen if it doesn’t ?

2 Likes

Btw i think you guys should inform in advance to all users of 1inch to vote for temperature check & in snapshot afterwards in Advance so that they can prepare as there could be some new users signing up or having problems doing it . & just in case maybe some random rewards of some sort of for voting etc

1 Like

I want to alert as many as possible to the Snapshot vote. Like you said, the 10M quorum is quite the hurdle and we need to get enough people aware of the proposal that we hit it.

Any monetary rewards for voting would need to pass the proposal process (which puts us in a pickle). However, we’re working on POAPs now – I was hoping to issue them to people who delegate their st1INCH to an active delegate, or, people who vote.

1 Like

That’s cool .

BTw here are some ideas posted by user over governance activity UI you might wanna see

[ Discussion Panel ] Making 1inch Tokens ULTRA - USEFUL! - #75 by Genkai.Shogun

[ Discussion Panel ] Making 1inch Tokens ULTRA - USEFUL! - #60 by Genkai.Shogun

[ Discussion Panel ] Making 1inch Tokens ULTRA - USEFUL! - #73 by cryptoCMminer

[ Discussion Panel ] Making 1inch Tokens ULTRA - USEFUL! - #96 by Genkai.Shogun

2 Likes

Please check original message, I’ve added voting in the top. :nerd_face: :cupcake:

3 Likes

Thanks!

I made a couple editorial changes:

  • Changed the tag to phase-3
  • Updated the poll to only allow users to select one option (for some reason it defaults to 2)

Phase-3 Temperature Check voting is now live!

5 Likes

could you post the phase3 link to vote? thanks

2 Likes

Phase-4 voting just went live on Snapshot! Here’s the direct link – [1IP-05] Add Derivative Aggregation to 1inch Network | snapshot

5 Likes