On November 27th an emergency AIP was pushed to increase yvcrvstETH and cvxRenCRV interest rates. As explained in the AIP, this measure was implemented to incentivise users to close their positions and secure the at-risk collateral.
A few days later, thanks to the cooperation with the Sushi team, we have been able to come up with a better solution that will safeguard users and the protocol at the same time.
We will explain how the collateral migration will work in the following article!
This migration will only affect the collateral deposited into 2 different markets, currently residing on Bentobox. If you are not a user of these markets, this migration will not affect you in any way!
The yvcrvstETH and cvxRenCRV addresses are:
0x35a0Dd182E4bCa59d5931eae13D0A2332fA30321
0x0BCa8ebcB26502b013493Bf8fE53aA2B1ED401C1
Firstly, the yvcrvstETH cauldron’s oracle is subject to a vulnerability that poses a direct threat to users deposited funds. Unfortunately this is an old cauldron, without the possibility to replace this faulty oracle.
Secondly, for cvxRenCrv, the recent developments on the deprecation of Ren Bridge v1 make us uncertain on what the best path forward is with this kind of collateral.
Multiple other protocols have already begun discontinuing their renBTC markets:
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We have recommended our users multiple times to close their positions, through announcements, tweets and even reaching out to individuals.
The two markets TVL has decreased a lot but it still represents a risk for users and protocol.
We have therefore come up with a solution that will secure both markets, permanently.
In order to execute this solution, we are coordinating with the Sushiswap team to migrate user positions from those two markets to two new markets that will reside on the latest version of our Degenbox contract.**
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The migration will happen through the use of a strategy that will take out all the collateral inside these markets, and send the tokens to our operational multisig that can be found here. These strategies have already been queued on Bentobox and are now ready to be executed.
They can be found here:
At the same time, two new markets will be deployed on Degenbox. We will automatically recreate the identical user positions from the original cauldrons. In other words, if a user has a position in the original cauldron consisting of $100 of collateral and 30 $MIM borrowed, then that user will have that same position in the new cauldron consisting of $100 of collateral and 30 $MIM borrowed. In order to achieve this, a snapshot will be taken just before the actual migration occurs.
User debts will then be transferred to the new cauldrons, and our multisig will mint the adequate amount of MIM to close user positions in the old markets. This measure will be taken to ensure that users do not have any unbacked, open positions in the old markets.
Cauldron parameters at deployment will be the same as the old cauldrons.
Once the cauldrons are deployed and the collateral is in our multisig, Abracadabra will then deposit all the collateral in the newly deployed markets, allowing users to interact again with these markets on our front end.
For the yvcrvstETH cauldron, it will use an improved oracle, which has been patched to correct the security issue.
For the cvxRenCrv cauldron, we will redeem the LP tokens for WBTC, and then use WBTC as the new cauldron collateral. This measure is taken to make sure that users who may have forgotten about their open positions, will be protected from the possible sunsetting of the ren bridge.
After this final step is complete, the migration will be complete and the markets will be secured.
If you are a user of the yvcrvstETH cauldron, nothing will change for you. The UI will be still the same, but you will be interacting with the new cauldron.
If you are a cvxRenCrv user, your position will be the same, but your collateral will be WBTC instead of cvxRenCrv.
This migration process is not without risk. Therefore, if you have a position open, we recommend that you close it in the next 24 hours. If you do not, then you will automatically be migrated in accordance with the process outlined above.
We will share more information once the migration is complete. Finally, we’d like to send a huge thank you to all of our industry partners who have helped coordinate this delicate migration!
If you have any questions, please reach out to us on our Discord Server!