Grant Proposal Application - TriAngle DAO, the Borrowing and Lending Protocol for CFX Backed Algorithmic Stablecoin

[TriAngleDAO]

1) Funding Tier:

Tier 1 - 3 whole development process: Funding amount requested - $100K

2) Project Overview

• Project title and description of the project.

Project Title: TriAngle DAO (We hope that the TriAngle stablecoin AUSD exhibits the same stability, pressure-resistance, and ubiquity as its shape stands for.)

Project Description: TriAngle DAO is a globally accessible stablecoin protocol that provides stablecoins at 0% interest to anyone, anywhere, anytime, aiming to bank the unbanked people. Specifically on Conflux Network, it is a decentralized borrowing protocol offering interest-free liquidity via stablecoin AUSD against collateral in CFX. By utilizing a novel liquidation mechanism and leveraging an algorithmic monetary policy, it can offer unprecedented benefits for borrowers.

Project Slogan:

Banking the Unbanked, Making Trustless Finance Accessible to Everyone.

Get and use stablecoins at 0% interest. Anyone, anywhere, anytime.

• How will this project be integrated into Conflux?

TriAngle DAO’s genesis launch will be on the Conflux Network, with USD-pegged stablecoin, AUSD (short for TriAngle USD) as Conflux’s first native stablecoin!

TriAngle token contract (AUSD issuance) and DAO contract (community governance voting schemes) will be deployed on the Conflux Network.

With the development of TriAngle DAO, AUSD will be launched soon in multi-ecosystems and be used in various scenarios among Conflux and outside-of-Conflux Dapp ecosystems to further incentivize liquidity migration to Conflux.

• Why is your team interested in creating this project?

There are significantly large portions of global population remaining unbanked or underbanked. TriAngle believes every human being deserves equality, and has the right to enjoy the benefits of financial services fairly. With the blockchain, smart contracts and tokens, TriAngle DAO is eager to provide financial services of stablecoins to everyone, and eventually to construct a better financial world in a decentralized and sustainable way.

In terms of choosing Conflux Network, to be specific, there are three main reasons:

1. USD stablecoins are the fundamental assets of Conflux Ecosystem, especially for DeFi legos. There is a huge demand of USD stablecoins from Conflux community and Conflux Dapp projects. However, there aren’t many USD stablecoins circulating throughout the whole ecosystem. We believe a protocol-issued native stablecoin with crypto assets backed and an algorithmic mechanism would greatly benefit the Conflux Ecosystem.

2. The most circulated crypto asset and the most widely used cryptocurrency on Conflux Network is CFX. Due to the lack of usage scenarios, CFX holders are constrained in DeFi activities and are in demand of a practical solution to increase liquidity while holding CFX on hand. TriAngle believes CFX-backed stablecoins are able to address the situation.

3. In addition to the issuance of stablecoins, the reliability and stability of the protocol should also be taken into consideration. Among all borrowing and lending protocols in the market, “Liquity Protocol on Ethereum” is one of the most secured and well-designed protocols that support stablecoins. Thus, TriAngle takes "Liquity " model as prototype and further tailors features and mechanisms to better satisfy CFX holders’ needs.

3) Project Details:

• High-level technical approach, product flow & architecture (along with a diagram).

• Any mockup designs of user interfacing components.

The TriAngle team is working on product design and user interface design. Will upload updated snapshots later.

• Overview of the technology stack being used, including API specifications, and documentation of core components.

Tech Stack used: Express Web Framework (Node.js) for back end, Vue.js (JavaScript) for front end, Solidity with ConfluxTruffle for contracts.

Smart contracts to be deployed on Conflux blockchain:

1. Borrower (Trove) Operations: contains basic operations by which borrowers interact with their Trove: Trove creation, CFX top-up / withdrawal, stablecoin issuance and repayment
2. TroveManager: contains functionality for liquidations and redemptions
3. Stability Pool: contains functionality for Stability Pool operations: making deposits, and withdrawing compounded deposits and accumulated CFX and TAD gains. Holds the AUSD Stability Pool deposits, and the CFX gains for depositors, from liquidations.
4. AUSD token: stablecoin token
5. TAD token and Staking Functions: secondary token

• Ecosystem fit: How can the project benefit Conflux Network’s ecosystem?

TriAngle stablecoin AUSD as a problem-solver benefits several parties:

1. CFX holders: In addition to increase liquidity and DeFi usage scenarios, CFX holders are able to earn rewards by participating in liquidity mining, stability pool and staking pool in TriAngle protocol, and most importantly they are free to withdraw all or part of their crypto assets anytime.

2. Crypto Investors: Crypto investors are able to rely on a stable currency to trade, pay, receive, and most importantly get out of price volatility of cryptocurrency.

3. DeFi Users: DeFi users are able to use a widely-accepted currency as medium of exchange to interact with DeFi Dapps.

4. Dapp Developers: Stablecoin is widely used in many DeFi Projects. Stablecoin AUSD is a great measure of value for all on-chain Dapps. Stablecoins can empower DeFi developers in all ways.

5. Conflux Ecosystem: The significance of stablecoins in the cryptoworld has been widely acknowledged, such as BUSD to Binance chain, ETH to Ethereum, and SOL to Solana. A native stablecoin plays a vital role in supporting on-chain ecosystem and on-chain crypto economy. In this case, Conflux’s first native stablecoins AUSD will enable Conflux users to easily participate in community activities, social events, airdrops, liquidity mining, etc., instead of going through a complex process of cross-chain stablecoins exchanges.

4) Team:

TriAngle DAO is proposed by a global-based decentralized autonomous organization. The core team and early contributors prefer to remain anonymous and firmly believe that a decentralized financial world should be initiated by a decentralized organization and further developed and governed by a Decentralized Autonomous Organization (DAO).

5) Development Roadmap:

6) Long Term Vision: What is the team’s long term vision for the project?

Building a better financial world with TriAngle.

• Financial Freedom
• Financial Efficiency
• Financial Transparency
• Financial Connectivity

TriAngle DAO is committed to providing decentralized financial services in stablecoins and banking the unbanked individuals. With a globally accessible stablecoin protocol, people everywhere can easily get and use stablecoins at 0% interest anytime.

Long Term Roadmap

1. TriAngle meets Conflux（Deposit CFX as collateral to borrow AUSD）
2. Deploy at multi-chains（e.g. Etherum, BSC, HECO, Polygon, Solana…）
3. Support multi-crypto assets as collateral
4. Apply crypto assets cross-chain solutions
5. Hand over to DAO

7) Community Engagement:

TriAngle’s tutorials will be released to the Conflux community and to the public 2 weeks prior to the product launch date.

8) Delivery Requirements:

Github repositories are required for the delivery of your project, including test suites (e.g. integration tests if applicable) and will guide you on how to run the project.

GitHub: https://github.com/triangle-dao

9) Other:

Will provide TriAngle’s pitch deck later.

[MrH]

[fun]

Coooooool! The most anticipated project for me.

[TriAngleDAO]

TriAngle DAO is thrilled to kickstart the journey with Conflux Network!
Please email [email protected] with any questions you have regarding the application.

For business or partnership inquiries, please reach out: TriAngle DAO at [email protected]

[GeorgeZ]

Nice Project! There is a huge demand on stable-coin from Conflux Community.

[11162]

Very Cool Project !!

[blockfund]

Nice!

[windy_fly]

好项目！

[cfx100u]

什么时候做好！

[GeorgeZ]

看帖子的申请表说的是十一月出来

[thegaram]

Thank you for applying for a Conflux Network grant!

1. Your figure shows that you use 110% collateral ratio. Is that enough to keep your peg stable in the presence of high volatility in CFX price? Can you please elaborate more on this?

2. Your application mentions DAO and cross-chain as core components. As you’ll need price information, you’re likely to need price oracles too. What technologies do you plan to use for these components?

3. Your project is based on Liquity, what are the main differences?

4. What is your timeline for transitioning to DAO governance? What kinds of decisions can stakeholders propose and vote on? What other utility does the TAD token have?

5. For the first version, what kinds of stablecoins and collaterals will you support? What’s your timeline for adding more options? Are multi-collateral assets part of this grant application?

6. Your mission statement mentions the unbanked, but it’s likely that your initial users will be existing Conflux / DeFi users. What is your plan reaching out to the “unbanked”?

7. Any plans of providing fiat-onramp so that users can get TriAngle stablecoins for their fiat money directly?

8. How do you plan to acquire your initial user base? Are there any early incentives? What is your pre-launch marketing plan?

[Geoff]

Thanks for submitting your proposal @TriAngleDAO! A native stablecoin would be a valuable addition to the Conflux ecosystem. Just some initial scoping questions (which echo alot of Peter’s questions above)!

1. Can you please describe the stablecoin minting process a bit more? What assets can be used as collateral? How does the liquidation mechanism work? How does the system ensure that the issued stablecoins keep their $1USD peg? Do you have a mathematical model or any simulations you can share?
2. You mention Triangle is based on Liquity, which is a single assets, over collateralized stablecoin. What changes are needed on this forked codebase to account for the different risk profiles of CFX over ETH? What changes are needed to account for the other assets in your roadmap? What differentiates you from Liquity?
3. What is your go-to-market strategy? Can you elaborate on who your target market is and how you plan to bootstrap users and TVL.
4. Will you incorporate staking CFX for interest into Triangle?
5. Can you describe your multi-chain strategy a bit more? You mention your plan is to eventually launch TUSD “outside-of-Conflux Dapp ecosystems to further incentivize liquidity migration to Conflux”. Can you elaborate?
6. What cross chain bridge(s) will you use to support your multi-chain vision?
7. Since grant payments are milestone based, for Tier 1 of your funding roadmap please break up the deliverables into payment milestones. See Development Roadmap for a template of what is required here: Grant Proposal Application - Template
8. What is the utility of the TAD token at mainnet deployment?

[Tristception]

Seems like Geoff and Thegaram asked all the good questions, Look forward to your replies on them. @TriAngleDAO

[TriAngleDAO]

Hi, Peter. Thanks for your good questions!

1. TriAngle DAO is striving to provide as higher capital efficiency as possible to its users. 110% is the threshold that ensures the stablecoin supply remains fully backed, in order to keep enough margin for the subsequent price drops in difficult situations. TriAngle will suggest users put at least 150% collateral worth of value to hedge the presence of high volatility in CFX price.

• Here is a brief introduction of how the liquidation mechanism works. TriAngle utilizes a two-step liquidation mechanism in the following order of priority: 1. Offset under-collateralized Troves against the Stability Pool containing AUSD tokens. 2. Redistribute under-collateralized Troves to other borrowers if the Stability Pool is emptied. TriAngle primarily uses the AUSD tokens in its Stability Pool to absorb the under-collateralized debt, i.e. to repay the liquidated borrower’s liability. Recovery Mode kicks in when the total collateral ratio (TCR) of the system falls below 150%. Since TriAngle V1 has the same liquidation mechanism as Liquity, check out the article below for more details. https://github.com/liquity/beta/blob/main/README.md#liquidation-and-the-stability-pool
• Here is a brief introduction of how the pegging mechanism works for AUSD. The pegging mechanism contains two parts, hard peg, and soft peg. The hard peg mechanism leads to arbitrage opportunities when the price of AUSD is below $1 or above $1.1. Users can call the redemption function to redeem 1 AUSD to $1-valued CFX if the price of AUSD is below $1. Users can also deposit CFX and borrow AUSD with a 110% collateral ratio and get more CFX than deposited if AUSD is $1.1 above. Since TriAngle V1 has the same Pegging mechanism as Liquity, check out the article below for more details. https://medium.com/liquity/on-price-stability-of-liquity-64ce8420f753

2. Currently Conflux has only one oracle solution, Witnet. As the price feed is crucial to Triangle Protocol, the tech team will develop a backup oracle service (price feed from major CFX-listed exchanges) in addition to existing Witnet Oracle Service.

• The cross-chain strategy is one of the most important steps for TriAngle Protocol. We plan to work on the cross-chain solution after TriAngle landing on multi-chains. By leveraging the cross-chain solution, TriAngle users are able to deposit their main assets to any chain and borrow stablecoin-assets from any chain.

3. There are five main differences:

• Two new features on the TriAngle Product: 1. Time dimension will be added to the staking pool, which means higher APY will be delivered to loyal depositors. 2. A more fair opportunity will be provided to the stability pool provider.
• Multi-assets support as collateral and multi-currency stablecoins support as debt in V2.
• TriAngle will be partnered with Dapps and the real-world ecosystem.
• The cross-chain solution in the future.
• DAO governance in the future.

4. TriAngle DAO plans to kickstart DAO governance rules once TriAngle Protocol deploys on majority chains, such as Conflux, Ethernum, Binance Smartchain, at least after one year from genesis launch day.

• Utility: TAD can be used to initiate proposals and vote in the later version. There are two major utilities of TAD, first and the most important utility is governance, use to construct and maintain the decentralized community, these tokens can be staked in order to earn a proportion of the protocol revenue stemming from borrowing and Redemption Fees.
• Decision-making: stakeholders can initiate and vote on several proposals, such as opening new pools, adjust incentives slope, operation strategy, usage scenarios, and etc.

5. For the first version, TriAngle will support CFX as collateral and USD-pegged stablecoin AUSD as debt.

• TriAngle will start V2 development immediately right after the V1 launch. We expect at least 3 months for V2 development as it is an innovative upgrade on TriAngle Protocol’s smart contracts, which includes multi-collateral support and multi-currency stablecoins support. Token Selection is based on marketing & business development.
• This grant application only covers the costs for V1, multi-collateral assets (V2 function) are not part of this grant application.

6. For the first version, TriAngle’s initial users will be existing Conflux / Defi users. Bank the unbanked population is part of our long-term goal.
   According to the World Bank’s latest report, nearly 1.7 billion people are unbanked globally. That’s close to one-fourth of the global population. But those people have smartphones. Blockchain and stablecoin give unbanked individuals digital access to financial services with more stable money. Meanwhile, TriAngle will expand real-life usage scenarios by partnering with financial institutions and companies.

7. On Conflux Network, fiat-onramp might not take into consideration due to Regulation issues. While TriAngle will keep the fiat-on ramp on hold, look forward to future possibilities on other blockchain networks.

8. Initial User Base: CFX holders and stablecoin demanders on Conflux Network
   Early Incentives:Users that drive growth and robustness by contributing to system stability get rewarded with TAD, the system’s secondary token.
   Pre-launch Marketing Plan:

   Step 1: Generate Awareness

• An announcement to get users excited: Press release & Social Media Channels & Conflux Community

• An article to educate the target audience about the features & tutorials: Medium

• Promotion on social media and community, highlighting the benefits: Twitter & Telegram

  Step 2: Exposure- content marketing

• Crafting and promoting high-level content and investing in SEO & Keywords.

  Step 3: Boosting the community

• The campaign “Get TriAngle’s Stablecoins” involved leveraging owned channels (both Conflux & on-chain projects Community) to reach the target audiences (which consisted of people who owned CFX)

• The end result: TriAngle will generate an estimated 10,000 DeFi users through GTM strategy.

[TriAngleDAO]

Thanks for all your great questions, Geoff!

1. The stablecoin minting process is quite similar to the common borrowing and lending protocol. TriAngle takes CFX as collateral to mint stablecoin AUSD, at a minimum 110% collateral rate, with its unique liquidation mechanism.

• Here is a brief introduction of how the liquidation mechanism works. TriAngle utilizes a two-step liquidation mechanism in the following order of priority: 1. Offset under-collateralized Troves against the Stability Pool containing AUSD tokens. 2. Redistribute under-collateralized Troves to other borrowers if the Stability Pool is emptied. TriAngle primarily uses the AUSD tokens in its Stability Pool to absorb the under-collateralized debt, i.e. to repay the liquidated borrower’s liability. Recovery Mode kicks in when the total collateral ratio (TCR) of the system falls below 150%. Since TriAngle V1 has the same liquidation mechanism as Liquity, check out the article below for more details. https://github.com/liquity/beta/blob/main/README.md#liquidation-and-the-stability-pool
• Here is a brief introduction of how the pegging mechanism works for AUSD. The pegging mechanism contains two parts, hard peg, and soft peg. The hard peg mechanism leads to arbitrage opportunities when the price of AUSD is below $1 or above $1.1. Users can call the redemption function to redeem 1 AUSD to $1-valued CFX if the price of AUSD is below $1. Users can also deposit CFX and borrow AUSD with a 110% collateral ratio and get more CFX than deposited if AUSD is $1.1 above. Since TriAngle V1 has the same Pegging mechanism as Liquity, check out the article below for more details. https://medium.com/liquity/on-price-stability-of-liquity-64ce8420f753
• Currently we do not have any mathematical model simulations that could share. However, we plan to do a model simulation before the official launch, covering AUSD, CFX, and TAD. Since we have 100% same peg mechanism and liquidation mechanism as Liquity Protocol, there is an analysis article regarding the performance of Liquity Protocol under volatile market conditions as reference. https://medium.com/liquity/how-liquity-handled-its-first-big-stress-test-160f20d5b18f

2. For using CFX over ETH, because Conflux Network is not 100% compatible with Ethernum, the team needs to tweak smart contracts to make them runing on Conflux Network and working well with cToken standard. Also it needs to develop the connection with ConfluxPortal.
   For other assets supports, there is a significant update on smart contracts for multi-collateral with separated banks. Also it needs to work on different stablecoins peg mechanisms.

   There are five main differences:

• Two new features on the TriAngle Product: a. Time dimension will be added to the staking pool, which means higher APY will be delivered to loyal depositors. b. A more fair opportunity will be provided to the stability pool provider.
• Multi-assets support as collateral and multi-currency stablecoins support as debt in V2.
• TriAngle will partnered with Dapps and the real-world ecosystem.
• The cross-chain solution in the future.
• DAO governance in the future.

3. The go-to-market strategy is all about TriAngle’s key mechanism. TriAngle plans to provide different mining pools for CFX holders. CFX holders can deposit CFX and borrow AUSD, then stake AUSD to stability pool for mining. The usage scenarios of AUSD will incentivize users to deposit more CFX to the TriAngle protocol.

4. No. We believe TriAngle’s mechanism has solid value support for TriAngle Protocol. There is no need to count the interest of staking CFX in.

5. The first step of multi-chain strategy is TriAngle plans to deploy V1 on multi-chains. By gathering users and liquidity on multi-chain by TriAngle’s features, the cross-chain bridge will help liquidity migration among TriAngle protocol.
   AUSD will eventually be an easy-to-cross-chain stablecoin. Once AUSD holders outside-of-Conflux are interested in any Dapps or pools in Conflux Network, they can easily participate into the projects with AUSD on hand to Conflux, through TriAngle. If AUSD is a medium of exchange in multi-chain as a premise, then those AUSD holders are able to migrate liquidity from chain to chain. Considering Conflux Network’s liquidity is relatively flat compare to Ethereum, Solana, Binance and etc., so Conflux will certainly be the beneficiary.

6. TriAngle will use ShuttleFlow as the cross-chain bridge. If ShuttleFlow can not meet our cross-chain needs, TriAngle’s tech team will build an own bridge designated to serve AUSD.

7. Milestone 1 DEMO

   1. TriAngle Website v0.1
   2. TriAngle APP Demo (forked from Liquity to Conflux Testnet)

   Milestone 2 TESTING

   1. Brand new TriAngle APP UI
   2. New features development on fair stability pool and time-dimension staking
   3. Tokenomics ralated development

   Milestine 3 LAUNCH

   1. TriAngle Website v1.0
   2. TriAngle APP test
   3. Smart Contract Audit
   4. Protocol data summary and analysis

8. There are two major utilities of TAD, first and the most important utility is governance, use to construct and maintain the decentralized community, these tokens can be staked in order to earn a proportion of the protocol revenue stemming from borrowing and Redemption Fees.

[TriAngleDAO]

Hello everyone! Thanks for all your great questions during the interview call. We’ve updated a detailed milestone & deliverables chart covering both dev and marketing. Two major changes are listed below:

1. We decided not to apply development cost in this grants application, so we removed the corresponding cost and adjusted the total amount of the grant budget.
2. Considering the priority of Conflux Network and the importance of stablecoins at Conflux, we decided to engage more with the Conflux community and ecosystem in the early stage. Thus, TriAngle raised the marketing&operation budget on marketing professionals, pre-launch campaigns, and marketing&operation-related activities, the respective deliverables are attached to the following chart.
   
   
   
   TriAngle welcomes comments, suggestions, and questions. Please don’t hesitate to reach us at [email protected].

[Geoff]

Thanks for updating the milestones! I think your roadmap is much clearer now. Below are some proposed milestone for your Tier 1 grant. Please review and input where you see a “?” below.

Once you have inputed below and verified the milestones we can proceed with the vote

[TriAngleDAO]

Hi Geoff, thanks for your reply. For Tier 1 grant Milestone 3, beta testing is not applicable at this stage, instead, internal testing will be run by internal developers and special invitations. In milestone 4- community onboarding, deliverables can be broken up into the following three parts:
-Project announcement: 1 Medium Article & Tweets
-100+ followers in each social channel
-Active global social channels
AMA will be delivered later in Tier 2 grant. Hope that answers your questions. Please feel free to ask any follow-up questions.

[Geoff]

Thanks for the notes @TriAngleDAO! I think it all looks good.

One thing to flag, is that part of the onboarding process, new grantees all must have an AMA to introduce themselves to the Conflux community. So an AMA will also be part of the Tier1 Milestones - in addition to the AMA outlined in the Tier2 grant.

Other than that I think your edits look good. No more question on my end. Thanks!

[Grants_Committee]

Congratulations @TriAngleDAO your grant application has been approved by the Global Grants Committee!

Excited to work with you and your team to make TriangleDAO a huge success

For reference, below are the voting results: