| Header | Content |
|---|---|
| Author | Ermin (@_ermin) |
| Created | 2024-08-09 |
| Status | Draft |
Motivation
dHEDGE first launched in 2020 with the Version 1 of the protocol on Ethereum Mainnet. It was built on top of the Synthetix protocol. This was a first of its kind allowing non-custodial asset management vaults with 0 slippage trades before most even knew what DeFi was. Since then, dHEDGE launched v2 with a significantly overhauled smart contract infrastructure allowing for interaction with many new DeFi products and combinations of strategies.
Recently Synthetix has deprecated synthetic asset trading on their Ethereum Mainnet protocol, which means that dHEDGE v1 vaults are sitting idle and unproductive in sUSD. Additionally there is an overhead in maintaining the v1 infrastructure.
The proposal here is to migrate dHEDGE v1 Mainnet vault assets to v2 on Arbitrum L2 and deprecate the v1 vault frontend.
V1 vault depositors will be able to withdraw their underlying assets from the Arbitrum dHEDGE v1 Assets vault.
Description
Users can take their deprecated Mainnet v1 vault tokens and claim the underlying assets from Arbitrum to receive a yield bearing stable dHedge vault token.
The underlying yield bearing v2 vault strategy can utilise LP stablecoins, deposit on Aave, or use a delta neutral strategy to achieve yield targets.
After a v1 depositor claims their underlying v2 dHedge vault tokens, they get exposure to the strategy yield.
Implementation
The migration of v1 assets to v2 and v1 frontend deprecation can happen as follows:
Add deprecateAndTransfer function to v1 vaults
V1 vaults to have an additional deprecateAndTransfer function. This function will disallow any new deposits into the deprecated vaults and allow for migration of the underlying sUSD to Arbitrum v2 dHEDGE v1 Assets vault.
Redemption and Burn
A redemption and burn contract to be deployed on both Mainnet and Arbitrum that accepts deprecated v1 tokens and gives the user the underlying vault tokens on Arbitrum. The exchange rate between each v1 vault token and v2 token is fixed at time of deprecation of the v1 vault.
User interface updates
V1 vault pages to be updated to only support redemption functionality because they are effectively not usable anymore since the Synthetix Mainnet synth deprecation.