[RFC] Add Extrafi XLend’s Eth Pool to Lower Risk Eth Vault

[MasterMojo]

Summary

Onboarding Extrafi XLend Eth to be allocated for the Base Eth vault on the Lazy Summer Protocol. Link: https://xlend.extrafi.io/

Extrafi XLend Eth provides a competitive Eth yield solution throughout the Base network, and the protocol’s yield is sustainably incentivized with OP/EXTRA token rewards projected to continue for an extended duration, ensuring long-term stability for vault participants.

What is Extrafi XLend:

Extrafi XLend is a smart lending protocol offering multi-accounts and advanced lending/borrowing strategies.

In a long-term vision, XLend aims to be the liquidity layer empowering composable DeFi strategies.

Core Features

• Lending market based on a battle-tested codebase

• Newly designed user interface

• A lending market built on a battle-tested codebase.

• Multi-account system

• Sub-accounts: Enabling flexible portfolio management

• Simplified on-chain experience powered by smart accounts

• Automation & Liquidation-free strategies [*]

• Gas-free transactions [*]

New staking module offering sustainable yields [*]

• Single-asset staking with USDC or ETH

• Supercharged APY from sustainable yield sources (protocol risk absorption, incentives, and revenue sharing)

Comprehensive risk management

• Built on a highly battle-tested codebase with subsequent enhancements and fixes.

• Ongoing security improvements:

• Additional audits

• Work with industry-leading risk management experts

• Work with proactive security monitoring platforms

• A robust shortfall-protection mechanism [*]: liquidation + safety module + rainy-day-fund

• Backed by a team with over 3 years of DeFi risk management expertise

Motivation

Enhancing Yield: Extrafi XLend Eth currently offers 2.6 % Supply APY(OP Reward APY + Lending APY), higher than most Base Eth vaults.

Diversifying Opportunities: Extrafi XLend Eth provides a competitive Eth yield solution throughout the Base network, offering users access to higher returns compared to other Eth vault options. The protocol’s yield is sustainably incentivized with OP/EXTRA token rewards projected to continue for an extended duration, ensuring long-term stability for vault participants.

Specifications

Token: Eth

Network: Base

Contract Address: 0x3DFab48957692Ea210A882cD50dd7044C608384C

Risk Level: Lower risk

Informal Support Indicator

Should Lazy Summer DAO proceed with drafting a SIP to onboard this market to the Base Lower Risk ETH Fleet?

• [YES] - promote to SIP
• [NO] - needs more discussion

[jensei]

Hey @MasterMojo I appreciate you putting this RFC together and laying out the details so clearly.

Extrafi XLend’s ETH market on Base looks interesting, especially given the combination of a battle-tested codebase and the sustained OP/EXTRA incentive runway. The current APY is competitive for the lower-risk bucket. I believe a similar strategy is already present in Base ETH LR Vault (morpho_extrafi_xlend_weth) wrapped in Morpho.

I would appreciate if @BlockAnalitica can chime in with a risk assessment, that would help us promoting this proposal to a SIP. Overall, I am leaning supportive pending that risk review!

[MasterMojo]

Hey Jensei, any update on this? Has @BlockAnalitica chimed in yet?

Here are my thoughts on why its a great Low risk play:

Battle-tested codebase and proven mechanisms, Multiple security audits, Ongoing security measures (An active bug bounty program on Immunefi incentivizes whitehat hackers to report issues. The team partners with monitoring services like Hexagate for real-time threat detection.), No known exploits, and Risk mitigations(Permissionless liquidations, Utilization caps on pools, Asset-specific Loan-to-Value (LTV) ratios and collateral requirements protect lenders from borrower defaults.)

[jensei]

Hello @MasterMojo! Thanks for the ping, I have setup a pipeline with @samehueasyou to funnel strategies proposed (found on the Forum) to the @BlockAnalitica - to streamline the process. I believe ExtraFi proposal was not yet sent to them.

At the moment, I believe that it has been set as a:

1. Lower priority than HyperEVM deployment
2. @BlockAnalitica is “only” doing top 3-5/ reviews a week

The Hyperliquid / HyperEVM deployment was indeed posted earlier: [RFC] Deploy Lazy Summer Protocol to Hyperliquid HyperEVM (and pre-deploy on select new networks with 0 deposit caps)

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At the same time, I want to point out that there is nothing stopping anyone from pushing into SIP (SIP2.43) and even an onchain vote with 0 caps settings proposed for BA to adjust / work with after the vote. Its just for the sake of the process (preventing double-work; e.g.: LR/HR deployment) that this pipeline was established with them.

Maybe recently posted risk tier classification could be helpful here: BA Labs baseline criteria for recommending new ARKs - #3 by BlockAnalitica

Also, deployment of said ARK would have to occur pre-vote I believe. Maybe @halaprix, or @FBrinkkemper has some thoughts on the complexity of this ARK?

[Ceazor]

do you know the team?

Do they have bandwidth to monitor or have some pause/emergency reaction keepers/community powers?

3 years in space is not quite enough IMHO of a boast. if they are hungry, they will likely take on more risk.