A few days ago, we posted an ambitious proposal to fully automate ParaSwap, but proceeded without proper deliberation and discussion with the community. We recognize that this approach left many questions and doubts unresolved. As a result, we decided to pause this proposal and proceed at a measured pace, ensuring that every step and rationale behind the proposal are transparent and clear to the entire ParaSwap DAO community. Our aim is to establish a more robust long-term relationship between Mimic and Paraswap. In collaboration with the ParaSwap Core Team, we’ve elected to begin with a less ambitious proposal aimed at addressing the most urgently needed automation tasks, leaving the remaining aspects for a next stage. This way, it will be easier to clarify doubts and answer questions as we progress. We are pleased to present this initial proposal to you now.
Mimic is a robust tool to automate DeFi operations, offering non-custodial solutions such as fee collection. Our initial proposal with ParaSwap involved the collection and conversion of fees into the wrapped native token of each of the seven networks with which ParaSwap interacts. These wrapped native tokens would then be bridged to mainnet, and periodically withdrawn to an external address owned by the DAO.
While most of the proposal was implemented, the bridging process was not, as it was the final element for us to complete. The bridging was not included in the initial steps because our audited solution at that time did not cover all of the Paraswap chains, and was exclusively designed for the Hop protocol (which is limited to bridging only five chains). However, we are now ready to scale a multi-chain solution with Hop, Connext, and Axelar.
As of today, Mimic has conducted a total of over 700 transactions over 7 networks for Paraswap epochs, estimated to be 2200 minutes of nonstop manual work with transactions. Preventing errors and mitigating risks when interacting with DApps and contracts.
The diagram below offers a simplified representation of the current state of the ecosystem.
To facilitate better and closer discussions with the DAO, we will be initiating a new communication channel.
The main goals of the proposal are:
- Fully automate ParaSwap to reduce manual intervention and risks associated with it. This involves the automation of the most urgently needed tasks, including collection and conversion of fees into the wrapped native token for each of the seven networks with which ParaSwap interacts.
- Modify the existing system to improve efficiency and simplify distribution, including switching the swapping process to WETH instead of the wrapped native token, and automating the collection and conversion of fees from external partners.
- Improve the bridging process by automating it across all seven networks.
The metrics for evaluating the success of this proposal would include:
Successful implementation of all proposed changes required to remove the manual task in Optimism, Arbitrum, Polygon, Binance Smart Chain, Avalanche and Fantom. The following chart represents the final version when this proposal is implemented:
No more manual tasks on chains other than Ethereum, we can achieve improved efficiency, reduced costs, and minimized risks
The primary objective of this proposal is to automate the most urgently needed tasks. These tasks are deemed critical and pose a high risk when performed manually, thus the need for automating them becomes significantly crucial. This proposal will need some development and modifications in the existing solution, particularly in the collection and swap actions. We need to redeploy some existing contracts (such as tasks) and deploy new ones in every chain used by ParaSwap.
We plan to maintain the initially proposed fee (2%) and cap (5k). We decided not to change the pricing by increasing the cap without thoughtful consideration and discussions with the community. Same as before, we will not charge any setup, deployment or development fee. Our only request is to end the test period and activate the proposed fee and cap.
1. Swap to wETH task: Currently, all collected assets are swapped into the wrapped native token on each network. However, the ParaSwap Core team identified that for a simplified distribution, swapping to WETH instead of the wrapped native token would be more advantageous. This operation is being conducted manually at the moment. To implement this modification, we need to update the collect and swap action to convert assets to wETH across all chains in the existing environment.
2. Claim partner fee task: This feature is designed to automate the collection and conversion of fees earned by ParaSwap from external partners. As of now, this task is also manually undertaken by the core team on Ethereum, Polygon, and BNB. However, since the claiming address is occasionally unchangeable within the partner’s smart contracts, the environment must utilize existing contracts that hold the authority to claim these fees. To implement this change, we need to revise the current collect and swap action to claim partner fees using these authorized contracts.
3. Complete bridge to Ethereum task: Now that we have a thorough understanding of the bridging process, there is a final decision from the core team on which token to bridge, and Mimic has the ability to automate bridging across all seven networks, we will proceed to complete and deploy this task. In addition, we will introduce improvements to how these critical, time-sensitive tasks are executed. It is imperative that they are completed before the period ends and the final withdrawal on the Ethereum is carried out.
Timeline: Complete automation of all aspects outlined in the proposal and achieving the objectives stated in the second graph is estimated to take 3 weeks.
Security: During our previous dialogues, security emerged as a primary concern. In response to this, our Smart Vault component has been subjected to three thorough audits, and we remain committed to upholding these high-security standards. Our ongoing collaboration with Certora ensures that every new commit is consistently audited. Additionally, the solution we implemented for ParaSwap is entirely transactional. We do not retain any assets; they are perpetually in motion, being withdrawn each epoch before the cycle starts again. Importantly, it must be highlighted that the ParaSwap DAO always retains full custody of the assets. This added layer of protection and transparency reassures stakeholders and ensures their peace of mind.
Next Steps: As mentioned earlier, we have set an ambitious roadmap to achieve total automation in the forthcoming epochs. However, we’ve elected to split this roadmap into several stages, starting with the automation of current manual tasks that are critical. Some pending features requested by the Core team are: support for multiple versions of Augustus, multiple Fee Claimers, automation of the ParaBoost component, and the implementation of a flexible 80/20 withdrawal system. They still require further technical discussion within the core team and the community, and we want to dedicate the necessary time to ensure we are all aligned on these issues. This approach guarantees that our efforts remain structured and effective as we continue to complete and expand the fully automated fee redistribution for ParaSwap.
Website — mimic.fi
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Whitepaper — mimic.fi/whitepaper
Twitter — twitter.com/mimicfi
Discord — discord.mimic.fi
Medium — medium.com/mimicfi