Integration Grants Application '24: Flux Pool

#1

Flux Pool

Introduction

We propose to deploy Flux Pool, an Aave fork on the Conflux Network, bringing advanced decentralized lending and borrowing functionality to the Conflux ecosystem. This project aims to solve the following problems in the existing Conflux ecosystem:

  1. Lack of a robust decentralized lending and borrowing platform
  2. Limited options for users to earn passive income on their crypto assets
  3. Need for more sophisticated DeFi tools for risk management and liquidity provision

Alignment With Conflux Network

Benefit to Conflux Ecosystem

  • Developers will be able to utilize the system for creating new DeFi applications and products that need lending.
  • Protocols will be able to offer more services using flash loans.

Economic Benefit

  • Users can earn passive income by depositing their assets into lending pools.
  • Borrowers can access liquidity without selling their assets.
  • The introduction of different interest rate models will enable better risk management and returns for lenders.
  • It will attract more assets to the Conflux network, increasing overall liquidity and ecosystem growth.

Competitive Edge

Our competitive edge lies in being the first to bring Aave’s innovative features to Conflux, offering a comprehensive lending and borrowing platform. We also want to provide a community and branding to help build a unique identity on the Conflux network.

Are you an incorporated startup?

We are not a incorporated startup; however, if things grow larger we can form one if needed.

Technical Introduction

Problem Statement

Currently, there are no decentralized lending and borrowing platforms on Conflux that offer features like flash loans, rate switching, and stable rate borrowing.

Existing Solutions

There are currently no existing solutions for Aave-like functionality on Conflux. Implementing an Aave fork would introduce a whole new set of DeFi capabilities to the network. The Aave V3 code is also no longer under a BSL license and is now under an MIT license.

Purpose of the System

The purpose of Flux Pool will be to provide a decentralized lending and borrowing platform to Conflux, while also making it easier for users to earn yield on their assets and access liquidity.

Scope of the System

  • Fork and adapt Aave smart contracts for Conflux
  • Develop a user-friendly frontend interface
  • Implement multiple interest rate models
  • Enable flash loans
  • Integrate with Witnet for oracles
  • Potentially integrate with Pyth
  • Develop subgraphs for efficient data indexing and querying

Objectives and Success Criteria

  • Successfully deploy Aave fork on Conflux testnet and mainnet
  • Achieve $1 million in Total Value Locked (TVL) within 3 months of launch
  • Onboard at least 50 lenders within 6 months of launch
  • Facilitate at least 100 loans within 6 months of launch
  • Develop branding specific to Flux Pool and a Discord community
  • The main relevant KPIs for the protocol will be the TVL, number of active users, and loan volume

Technical Proposal

Functional Overview

Smart Contract Development

  • Adapt Uniswap v3 core and periphery contracts for Conflux
  • Implement multi-fee tier system (0.05%, 0.3%, 1%)
  • Deploy and verify smart contracts onto Conflux network mainnet and testnet

Subgraph Development

  • Design and implement subgraphs for efficient data indexing of ticks and swaps
  • Enable real-time data querying for improved user experience
  • Support advanced analytics and historical data access
  • We will also need support from Conflux with the subgraph and using their endpoint

Frontend Development

  • Create intuitive UI for trading and liquidity provision
  • Implement position management dashboard for LPs
  • Develop analytics and data visualization tools
  • Integrate with graphs to show tick data to pool

Non-functional Overview

Usability

  • Intuitive interface for both novice and experienced users
  • Mobile-responsive design

Reliability

  • Implement robust error handling and recovery mechanisms
    • Website will notify you when a transaction will fail
  • Ensure high uptime for the system

Total Budget

The total requested amount: $30,000

Breakdown

  1. Development: $6,000

    • Oracle Integration and Customization: $3,000
      • Change Solidity in AaveOracle.sol to support Witnet
      • Perform an internal audit for the change to ensure no issues
    • Front End Development: $3,000
      • Fork Aave3 front end and adapt to Conflux network
      • Host web servers and domain

  2. Liquidity and Growth Incentives: $19,000

    • Incentives for lending and borrowing: $14,000
      • Distributed through points system
      • 1 Point per $ lent
      • 2 Points per $ borrowed
      • 2x multiplier for re-staked CFX
    • Incentives for providing liquidity for FLUX/CFX pair: $5,000
      • Distributed for Uniswap V3
      • Given based on % of fees collected

  3. Marketing and Community Building: $5,000

    • Brand Development & Art: $1,000
    • Global marketing initiatives: $2,000
    • China-specific marketing efforts: $2,000

Development Roadmap

For each of the milestones, when all of the objectives are reached, the funding is released.

Milestone 1: Deployment on Mainnet & Audit & Initial Growth (1 Month)

  • Adjust AAVE oracle contract to accept Witnet as the main provider
  • Conduct internal security review for Oracle modifications
  • Launch FLUX governance token
  • Deploy Flux Pool contracts on eSpace
  • Reach 1,000 followers on Twitter (X)
  • Establish and manage community channels (Discord, Twitter, WeChat)

Funding: $6,000

Milestone 2: Community Growth and Marketing (2 Months)

  • Reach 5,000 followers on Twitter (X) and 100 users on Discord
  • Reach 100 Monthly Active Users
  • Begin marketing in China with Conflux

Funding: $5,000

Milestone 3: Incentive Program and Community Growth (3 Months)

We have broken down Milestone 3 into three sub-milestones with distinct KPIs and grant allocations. The TVL has to stay above the target TVL value for at least 14 days to unlock the KPI and the grant allocation.

Milestone 3.1: Achieve $1M TVL + Track Unique Wallet Addresses and Transaction Numbers

  • Achieve a TVL of $1 million
  • Reach 200 Monthly Active Users
  • Complete 300 transactions
  • Reach 10,000 followers on Twitter (X)
  • TVL must stay above $1 million for at least 14 days

Funding: $4,000

Milestone 3.2: Achieve $2M TVL + Track Unique Wallet Addresses and Transaction Numbers

  • Achieve a TVL of $2 million
  • Reach 300 Monthly Active Users
  • Complete 750 transactions
  • Reach 15,000 followers on Twitter (X)
  • TVL must stay above $2 million for at least 14 days

Funding: $5,000

Milestone 3.3: Achieve $3M TVL + Track Unique Wallet Addresses and Transaction Numbers

  • Achieve a TVL of $3 million
  • Reach 500 Monthly Active Users
  • Complete 1,000 transactions
  • Reach 20,000 followers on Twitter (X)
  • TVL must stay above $3 million for at least 14 days

Funding: $5,000

Milestone 4: FLUX and Governance Proposal

  • Pass 10 different proposals for FLUX
  • Reach 3,000 unique wallets
  • Reach $100,000 in liquidity
  • Partner with Witnet for 2 additional oracles

Funding: $5,000

Point System

We believe we can attract significant attention to Conflux and Flux Pool through a points reward system.

  1. Users will earn points for participating in our platform’s system.
  2. Points will earn users both CFX and FLUX tokens as rewards.
  3. Points conversion rate for FLUX tokens will be announced at the end of our points campaign.

FLUX Token Liquidity

We believe we can attract significant liquidity and attention to Conflux’s ecosystem through a FLUX token. We have a plan detailed below:

  1. The token will be given away through the points to motivate users to use the platform.
  2. Tokens will also be distributed along with the liquidity incentive.
  3. Through these two strategies, we can ensure that tokens go to users who are aligned with the protocol.
  4. To further boost liquidity, a partnership between Flux Pool and Conflux could be pursued.

Liquidity Attraction Strategy

  1. Implement robust incentive programs for lending and borrowing, powered by the increased grant allocation.
  2. Develop a tiered reward system to encourage long-term engagement and larger deposits/loans.
  3. Highlight the ability for users to leverage their CFX holdings with attractive rates.
  4. Enable users to lend their staked ABC CFX tokens on the platform.

Growth Plan

  1. Launch and actively manage Discord server and Twitter account.
  2. Collaborate with Conflux for promotional posts and community engagement.
  3. Implement a point system for incentivizing liquidity for the FLUX token and use a smart contract liquidity mining system.
  4. Engage with other projects in the Conflux ecosystem for potential integrations and partnerships.
  5. Develop targeted marketing campaigns for users to earn additional yield or leverage.
  6. Through collaborations with Conflux, we also hope to implement China-specific marketing initiatives:
    • Establish a presence on popular Chinese social media platforms (e.g., WeChat, Weibo)
    • Collaborate with Chinese crypto influencers and KOLs
    • Create educational content in Mandarin about Flux Pool and its features
    • Participate in China-focused blockchain events and conferences
    • Engage with Chinese DeFi communities and forums

Token Issuance Plan

  • Launch FLUX governance token for Flux Pool.
  • Token distribution:
    • 55% held by the DAO
    • 25% allocated to developers
    • 10% distributed through point incentives
    • 10% minted and locked with the grant as a liquidity boost

Long-term Vision

  1. Establish Flux Pool as the central hub for lending on Conflux.
  2. Continuously improve the platform based on user feedback and market trends.
  3. Explore integration with other DeFi protocols in the Conflux ecosystem.
  4. Implement additional features to enhance lending and borrowing functionality.
  5. Expand the range of supported assets for lending and borrowing.
  6. Collaborate with Conflux to develop custom analytics solutions for transparency and data insights.

Integration Plans

  1. Primary integration with Witnet for oracle services on Conflux.
  2. Explore potential integrations with other DeFi protocols as the Conflux ecosystem grows.

Note: We are using Witnet for oracle services because they offer a push-based oracle on Conflux. Pyth does not offer a push-based model, which is essential for our platform’s functionality.

Security Measures

While the core AAVE V3 contracts have been audited previously, we will conduct a thorough deployment check and continuous monitoring to ensure the security and proper functioning of the protocol on the Conflux network. We will also allocate resources for ongoing security reviews and potential bug bounty programs.

Team

The team is headed by Gnome and Cool Guy.

Gnome

Role

Smart contract developer and system architect.

Responsibilities

  • Responsible for the design and implementation of the protocol.
  • In charge of the development for the subgraph.
  • Responsible for setting up the Discord server and community channels.

Relevant Experience

  • Participated in over 10 hackathons, winning over $30,000 from all of them.
  • Built the smart contracts for AutoGains, a project that received a grant from Gains Network and Arbitrum.

GitHub

https://github.com/Gnome101

Cool Guy

Role

Front-end designer and marketer.

Responsibilities

  • Responsible for the design and implementation of the website’s front end.
  • Responsible for the marketing of the platform and working with the community.

Relevant Experience

  • Participated in over 10 hackathons, winning over $30,000 from all of them.
  • Worked as an advisor for multiple projects in the past and as a community moderator.

Terms of Use

I agree to all of the following terms of use in applying to a Conflux Ecosystem Grant:

  • I have read and understood the Conflux Grants Ecosystem Overview.
  • I have read about and understood that the Conflux Technical Grants are subject to a No-Sale rule.
  • I agree to provide KYC information to the Conflux Foundation for the sake of overall ecosystem security.
  • I understand that I will be required to follow public grant reporting requirements.
#2

Thank you for submitting your project’s proposal to the Conflux Grant Program. Unfortunately, your proposal did not pass the grant committee’s decision. We greatly appreciate the effort and innovation behind your project, and we encourage you to keep exploring future opportunities within the Conflux ecosystem.