Summer.fi Governance Call #1
Attachments: Summer.fi Governance Call #1
Summary
The Lazy Summer Protocol governance meeting, attended by Javier Martin Diaz, Frank Brinkkemper, Chris Bradbury, Block Analitica, Jordan Jackson, and Dark Lord Halaprix, reviewed the protocol’s initial performance and future direction.
Key discussion points included risk assessment methodologies, strategies for balancing simplicity with higher-risk options to achieve rapid growth, and the onboarding of USDC on Arbitrum. Block Analitica will provide parameters for the proposed EURC vault by next week, pending a governance vote granting them access to adjust settings for the USDC Arbitrum integration.
Details
Introductions and Meeting Goals
The meeting began with introductions, and Javier Martin Diaz, the community manager from Summer.fi, explained the purpose: to get to know each other and review the first few days of Lazy Summer Protocol governance.
Frank Brinkkemper introduced himself as a former Summer team member. He expressed bullishness on the Lazy Summer Protocol, envisioning its use by many people, including those unfamiliar with DeFi.
Protocol Vision and Simplicity
Chris Bradbury elaborated on the protocol’s vision, emphasizing simplicity and market-beating yields as key pillars. They highlighted the need to balance simplicity with the addition of higher-risk options for users, while also discussing long-term goals such as chain abstraction and integration into Web2 applications.
The ultimate goal is to reach billions in TVL and integrate the protocol into various Web2 apps, reaching 100 million users indirectly. They further emphasized the importance of integrating DeFi into existing apps rather than focusing solely on DeFi frontends.
Risk Assessment and Parameter Adjustments
Miller Mendoza from Block Analitica explained their risk assessment framework, which considers factors like collateral volatility, security audits, liquidity risk, and protocol age (“Lindy Effect”). They described their process of adjusting parameters based on this model and their experience, emphasizing a cautious approach initially, with gradual increases in deposit caps based on observed demand.
They also discussed the importance of managing max inflows and outflows to maintain market stability and prevent manipulation.
Higher-Risk Vaults and Risk Appetite
A discussion ensued regarding the addition of higher-risk vaults. Block Analitica expressed openness to this, but with caps and a need for detailed evaluation of proposals, highlighting the challenge of data gathering for less common protocols.
Miller Mendoza noted that the risk model for such vaults differs, focusing on utilization and avoiding high supplier concentration. Chris Bradbury raised concerns about maintaining simplicity alongside higher yields and discussed how risk appetite in the model could be adjusted to accommodate different risk levels.
They also highlighted the value of Block Analitica’s ability to react quickly to and mitigate risks in the vaults. Miller Mendoza explained their flexible approach to TVL percentages, gradually increasing risk appetite while acknowledging the trade-off between rewards and risk.
Governance Process and Approved SIPs
Javier Martin Diaz briefly reviewed approved governance proposals (SIPs), including a discussion about the quorum percentage, which is still in discussion.
They also mentioned the whitelisted fleet rewards manager, already deployed and functional, and its potential extension to new chains like Sonic.
Protocol Growth Strategy
Jordan Jackson discussed their vision for protocol growth, advocating for a more aggressive yet conservative approach towards higher-yield strategies within the next 18 months. This included exploring higher APY strategies, more aggressive deposit caps, and expanding beyond lending into areas like Sky Rewards and yield loops.
The main emphasis was on achieving rapid growth while managing risk.
Onboarding USDC on Arbitrum
Chris Bradbury confirmed the deployment of ARKs and the fleet for onboarding USDC on Arbitrum, pending a governance vote to grant Block Analitica access to set parameters. They discussed potential UI improvements for this integration.
EURC Vault Proposal and Keeper Functionality
A proposal for an EURC vault was discussed. Dark Lord Halaprix noted that implementing this would require defining a method for harvesting rewards and mentioned challenges in integrating protocols with low liquidity like Moonwell.
Block Analitica confirmed their support for this proposal and planned to provide parameters by the following week. They also clarified how keepers would manage the positions of future ARKs that include more complex strategies, including the potential use of multiple keepers for different tasks.