Artworks generated by Artificial Intelligence have been around for a while, with Christie’s selling an AI-generated portrait for $423k back in 2018. In recent months however, text-to-image tools have become available to a much wider public, creating a tsunami of new “artworks”.

Creative arts such as drawing, painting and writing have long required a high level of skill. AI tools such as MidJourney and DALL-E 2 are allowing anyone with an idea to simply describe it in a short prompt and see it come to live within seconds.

The ease with which anyone can now create a wide range of works raises some interesting questions. Such as:

• What is creativity?
• Who is the author; the computer or the prompt writer?
• How will this technology change the creative arts?
• How can these tools be used for good or for bad?

The UnRealArt exhibition is designed to let the visitor explore these questions themselves.

The UnRealArt exhibition shows hundreds of AI generated works by multiple “prompt writers” in a wide variety of styles ranging from photorealistic to abstract, classical to modern.

To experience how simple and fast the current tools are, visitors are also able to provide their own prompts and generate new artworks on the spot, which may be included in the exhibition.

All the works are also available at https://un-real-art.com, where they are available for purchase as NFTs.

The UnRealArt exhibition opening is at Treehouse NDSM unit M3 on the 16th of September from 4 to 9 pm. The exhibition will be open daily from 1 to 7 pm until the 25th.

The Issue

The Pixel contract includes BoringBatchable, allowing to make several calls on the same contract in a single call.

When painting on the canvas, the payment is checked by checking msg.value.

By using Batchable to make multiple calls to paint, the same msg.value sent is used to pay for each call.

This allowed for unlimited minting of PIXEL tokens and drain all MATIC out of the contract.

Securing Assets

In response we took the following actions:

• The MATIC earned by the team that was sitting on the contract is withdrawn.
• Most of the liquidity of the SushiSwap pool was until team control and was removed. Now less than $200 remains from 2 LPs. They should withdraw this.
• The UI was updated and the canvas is now ‘locked’. A snapshot of the canvas is taken and will be uploaded in the new contract.
• A snapshot of the PIXEL token balances was taken and these will be used to issue new tokens.

Way forward

We’ll redeploy both the canvas and a new PIXEL token will all the same balances. User don’t have to do anything. Once this is done we’ll announce a date and time the canvas will unlock and we’ll continue where we left off.

A massive thanks to Mudit for finding and reporting this! And a thanks to the community in supporting this project and please bear with us while we get this show back on the road…

— BoringCrypto

Update 1: All data (PIXEL balances, the canvas data, ambassador program info) has been extracted. Fixed contract is mostly done. Time for a nap as it’s 7am and I’d like to write the redeployment with a fresh mind. If all goes well we should be back up and running within a day.

Update 2: Full replicated deployment is live on the Polygon Testnet and the current site points to that. Currently loading the replicated state into Polygon mainnet. If all goes well this will take about 2 hours.

Update 3: Everything has been restored, canvas unlocks in 30 minutes.

Phase 1: Creation

Starting with a blank canvas of 1000x1000, pixels will be sold in blocks of 10 by 10. Each block has a description and a URL. Multiple blocks can be bought to create/upload larger images.

All the pixel data, descriptions and urls are stored fully decentralized, on-chain on the Polygon blockchain. The Polygon (Matic) blockchain was chosen for it’s low gas costs.

The starting price for each pixel is 0.1 MATIC. So a 10x10 block is 10 MATIC, which is around $10 at the moment.

For every pixel purchased, your receive 1 PIXEL token.

Once a pixel is sold, it can be bought for double the last sale price. So after it was bought for 0.1 MATIC, it will cost 0.2 MATIC. Then 0.4 MATIC, etc.

When you own a pixel that gets bought, the amount of MATIC you paid for it gets refunded to you. But you get to keep your PIXEL token. ✔️

Phase 1B: More creation on Ethereum

After the success on Polygon Chain, we held a snapshot vote for token holders and they unanimously voted to redeploy on Ethereum mainnet. Unlike most NFTs, all the information (including the pixels) are stored on-chain. This meant that deploying to mainnet cost 28.7 ETH ($93k). The team used the profits made on Polygon to pay for this.

The canvas will be open for another 2 weeks until the 28th of August. Prices are converted 10 MATIC = 0.005 ETH.

PIXEL tokens can be traded on SushiSwap.

Multi Level Marketing?

Yup, Pixel will include a 3 tier MLM scheme. You can create your affiliate link and refer others to Pixel Inc. If they buy PIXEL tokens, you’ll get 20% bonus. If they refer someone who buys, you’ll get 10%. And the 3rd tier will net you 5%.

Let’s take shilling to a whole new level! 😛

Phase 2: Perpetual Sale

Once the creation phase is finished, the final canvas is turned into a single NFT. This NFT will be for sale for 10% of what was paid in total. So if every pixel was sold once, total amount paid would be 50 ETH and the starting price would be 5 ETH.

When the NFT sells, the proceeds go to the PIXEL holder pool.

The NFT will ALWAYS be for sale for 150% of the last paid price. Anyone can buy the canvas NFT at any time for 150% of the last sale price. When a resale happens, the original sale price + 10% gets refunded to the last owner and the rest goes to the PIXEL holder pool.

So if the NFT gets sold over and over, the funds in the PIXEL holder pool will grow. PIXEL tokens can be burnt anytime to redeem their share of the PIXEL holder pool. With those PIXEL tokens burned, future sale proceeds will go to remaining holders, increasing their share.

Follow me on Twitter for updates: @Boring_Crypto
And join the Discord: https://discord.gg/UxkE7X9zZk

Questions?

Please ask them on Twitter or Discord…

What follows are just some personal notes, shared for others to maybe learn from to understand the protocol’s internals and to help the Abra team improve the UI. Sorry, not a very well written piece, more of a brain dump. It’s not advice of any kind and there could be plenty of mistakes.

The way I used it was to take USDT, deposit that into the USDT yearn vault v2, deposit that as collateral into Abracadabra, borrow MIM and sell the MIM for more USDT and then repeat the process. All the way to having $365k of yvUSDT as collateral. Since yvUSDT has an APY of around 8–9%, this should yield me about 55% APY.

There are obviously some risks:

• Exploits due to bad contracts
• Yield on yvUSDT drops
• Price of USDT drops and causes liquidation
• Other issues I haven’t thought of

There are also some interesting failure scenarios. If MIM loses it’s peg, I win… I would buy MIM for less than $1 and so it would become cheaper to repay my loan. But in turn this would drive the price of MIM up, so it would stabilize and soon recover peg. If MIM goes over $1, it’s a good time to borrow more and repay when MIM is back at $1. This again drives stability of the peg.

So overall I’m pretty happy with this investment and after doing a quick review of how the different values are calculated I may grow this position. My main concern is the stability of the yearn yield. I’ll revisit this in a few weeks to see what my actual APY has been.

YearnChainLinkOracle

This contract is similar to the Chainlink oracle used in Kashi markets. It get a price from Chainlink and then uses the following call to get the yearn vault price:

The yvUSDT pool is configured to use the Chainlink USDT/USD oracle and the pricePerShare from the yearn vault. As of 10-Jun-2021 the pricePerShare is $1.009069.

It’s important to note that the system assumes that the price of MIM = USD. So if the price of MIM would go over $1, this doesn’t seem to lead to liquidations.

CauldronLowRiskV1

This contract is based on Kashi and I licensed the code to Abracadabra for MIM. It’s a simplified version, because the interest rate is fixed and there is no lending, only borrowing.

My position is 314052741825296029002396 borrow parts and my collateral share is 365346401761. Let’s see what that means:

To convert from borrow parts to borrow token amount, we need to look at totalBorrow. We need to multiply our parts by the elastic and divide by the base:

314052741825296029002396 * 25445847382273525419267697 / 25442289703942533805642019 = 314,096,656,844,242,111,628,733

When you take the 18 decimals into account, we get 314,096.656 MIM borrowed. The UI currently shows parts, not amount. So keep this in mind. This will probably be fixed soon.

Now let’s check the collateral. We need to convert from share to amount using the BentoBox.toShare function. Although it’s still 1:1 right now. Then we need to get the price from the oracle by passing the oracleData on the cauldron contract into the peek function of the oracle. I get 990155. We have to divide to get the USD value of our collateral:

365346401761 / 990155 = $368,979.000 USD

This matches what is displayed in the UI. So my true collaterization ratio is 314,096.656 / 368,979.000 = 85.125% and the net value is 368,979.000 - 314,096.656 = $54882.344

Looping

Opening and closing a leveraged position is a little tricky at the moment, requiring ‘looping’. However, this is a UI limitation, as the contract has the ability to borrow MIM first, do all the swaps and then provide the collateral. As long as this is done in a single transaction and the collateral covers the MIM borrowed, this will work. Would be great to see this added to the UI :D

Update 27 June 2021

About 17 days have passed.

Borrow = 314052741825296029002396 * 21894779038779209323174401 / 21883650006387073379645963 = 314,212,454,813,558,623,568,379

Which is 314212.454 MIM (Increase of almost 116 MIM)

So it looks like the UI does show the borrow balance in MIM, but does NOT show the interest accrued.

The yearn price per share has gone up to 1.010276 This is an increase of 0.1207% over 17 days. That would imply an APR of 2.59%. (Yearn site is showing 2.71%, so it’s in the ballpark.)

The oracle now returns 988862, so the collateral is worth 365346401761 / 988862 = $369,461. This is a gain of $482. Subtract the borrow cost of 116 MIM and the net gain is $366. Which is a gain of 0.66% over the $55,000 principle. That’s an APR of 14.2% on USDT. Not as high as hoped, but yield have come down across the board it seems. The UI shows collateral of $369,103, which isn’t right.

Yearn: 2.71%
Aave: 2.60–3.51% (+ 2.10–2.71% in stkAAVE?)
Compound: 2.24% (includes COMP rewards)
Yearn looped with MIM: 14.20%
Kashi xSUSHI-USDT market: 14.30% (mostly SUSHI rewards)

So far so good… at least it’s outperforming straight yearn by 5.23x

Update 8 August 2021

Another 6 weeks have passed. Total 59 days now.

Borrow = 314,487 MIM (Increase of 391 MIM, UI still not correct)

Yearn pricePerShare = 1015150, oracle = 984600

Collateral = 365346401761 / 984600 = $371,060

Gain = $2081-$391 = $1690 = 3% = 19% APR

Caveat: This assumes MIM — USDT exchange rate of 1:1 but currently MIM is a bit below peg. The borrow is only 308019 USDT. So currently it’s a bad time to open a position and a good time to get out.

P.S. I earn SPELL tokens because the licensing fee is paid in SPELL (vesting over 4 years)

Before we dive further into this, let’s have a quick look at some common existing structures and their pros and cons.

On chain protocol governance

Compound and Uniswap have a fully on-chain model where every update to the protocol needs to be voted in by the DAO.

Pros

• On-chain protocol is fully decentralized (in theory, but on these cases too much voting power still rests with the original investors and team)

Cons

• Innovation is very slow
• Only small incremental updates are done, no new products are developed (unless the company decides to, outside of control of the DAO)
• Can be hard to reach quorum to get changes made
• Website is still developed, owned and operated by a centralized team
• High gas costs for DAO members

Snapshot governance

To overcome the gas costs involved with voting on-chain, a lot of projects have started using snapshot to do community voting. Since these are effectively ‘companies’ executing on their vision, they tend to be more effective in innovation and creating and upgrading products quickly. However, the DAO has only an advisory role and can be completely ignored, which kind of defeats the whole idea of a DAO.

Pros

• No gas costs to vote, leading to more participation
• Teams have freedom to innovate and update the protocol as they see fit

Cons

• The DAO has no recourse and no control over the protocol, they are in practice an advisory board
• The operator/team is in practice a dictatorship and can completely ignore the DAO

The Solution: Democratically elected dictatorship

So let’s combine the best of both worlds: clear vision with fast innovation AND true decentralization…

Founding

The first step in establishing this kind of DAO is that the Founder deploys the contracts for the DAO. This will start an establishment period (1 week) in which anyone can buy into a small release of tokens (through a Dutch auction) and become a Member of the DAO and vote for an Operator.

Once the first auction is finished and any Operator has over 50% of the votes, they become the Operator for the DAO. The funds from the first auction will vest for a period of time and then go to the Operator (the one active at the time vesting is done).

Operation

This auction process will continue (for instance weekly) to raise funding for operations. After the establishment period a much larger number of tokens will become available (every block) to incentivise the protocol (support farming) through a farming contract. (Like MasterChef in SushiSwap)

The Operator is free to deploy the weekly raised funds anyway they see fit and they will control the farming allocations. They can hire people, do marketing, build products, conquer the world… or they can just have boat parties…

This freedom can allow the Operator to innovate rapidly without too much red tape, politics, etc.

Oversight

However, if the Operator doesn’t perform as the DAO would like. DAO members can simply change their votes to another Operator. Once another operator gets over 50% of the votes, they will start to receive future auction funds and they will get access to the farming contract. This is all enforced by the smart contracts and cannot be changed/upgraded by the Operator.

So the DAO always retains ultimate control over the protocol. The DAO is the true owner of the protocol and they decide who to ‘hire’ to operate the protocol for them without ever giving up control.

More

There are other issues to tackle as well, such as web domain ownership, discord, Twitter, forum ownership, etc. For the domain, I think something cool can be done here with .eth domains and/or IPFS hosting, so any new Operator can redirect to a new IPFS site that they own. This doesn’t fully solve the situation when there is a ‘traditional’ domain name, but it’s a good step.

The others are a bit trickier.

Anyway, I’m exploring this because I’d love to be an Operator for a nice DAO that ran like this.

Bad idea? Good idea? Questions?

Either way, come discuss this on discord! Keen to hear your ideas around this.

To start, the term BentoBox was originally used for the lending solution, but as coding progressed, a new concept emerged. This I will refer to as BentoBox. The lending solution will be referred to as BentoBox Lending or simply lending.

The BentoBox

All the DeFi protocols work with tokens. They need to be stored somewhere. In most cases, they are stored in the contract that works with them. In the USDC-WBTC pair on SushiSwap for instance, the USDC and WBTC tokens are held in the contract for this specific pair. This way you need to approve each token for use in each protocol.

This is where the BentoBox comes in. The BentoBox is a single vault that holds all tokens. Not just for the lending contracts, but also for any other protocols and future extensions. Anyone can build extensions that use the BentoBox as their vault with these benefits:

• Once a token is approved for the Vault, any protocol built using BentoBox doesn’t need per token approval anymore.
• Low flat gas fees for internal token transfers (even between different protocols using BentoBox) and advanced transfers such as one-to-many transfers.
• Funds of users and protocols are separated internally. Only protocols that the user approves can access the user’s funds.

But more importantly, these are only some early benefits, when we move to BentoBox Plus, a lot more benefits get unlocked, as explained later in this post.

BentoBox Lending

The first product in the BentoBox is Lending. This is mostly as per described in my original proposal with some enhancements. In short:

• Anyone can create a lending pair with one asset token and one collateral token with a specific oracle.
• You can earn interest by supplying the asset.
• You can borrow the asset by supplying collateral.
• The target utilization is between 70–80%. This is the percentage of assets that are borrowed from the total supplied.

• The elastic interest rate moves up if the pair is underutilized and down if it’s over-utilized. The further it is from the target, the faster the interest rate will move. At 100% utilization, the interest rate will double every 8 hours. *
• When a user is up to 2% insolvent, the position can be liquidated against any approved ‘swapper’. Currently, there is one approved swapper for SushiSwap. The proceeds of the liquidation go 90% to the asset suppliers, 9% to the SushiBar and 1% to the developer (BoringCrypto).
• When a user is more than 2% insolvent, any user can liquidate the position and get the full 12% liquidation fee. There are several ways to liquidate, including a flash liquidation (or optimistic liquidation) that will give you the collateral and you have to repay the debt before the end of the transaction.
• Short functionality allows you to leverage a position by borrowing any amount of the asset, swapping it to collateral and depositing the collateral. As long as your position is solvent in the end. Unwind does the opposite.

Oracles

At launch, BentoBox Lending will support several oracles. No oracle is perfect as they each have their benefits and risks. Some risks are mentioned here. There may be other risks. It’s important to understand how these oracles work and what their strengths and weaknesses are.

SushiSwap TWAP (Time Weighted Average Price)

This oracle takes the average exchange rate between the tokens in SushiSwap over a period of time. The time period is between the last 2 calls to update the price, with a minimum of 5 minutes.

Benefit: Using this oracle opens up a wide range of tokens for lending that are currently not available on lending platforms. For many tokens, this will be the only oracle available.

Risks: The lending pool should probably not grow outsized in relation to the SushiSwap LP pool as that may lead to manipulation of the price to trigger liquidations.

The risks are somewhat mitigated by the elastic exchange rate optimizing for 70–80% utilization of the assets. This should in most cases keep TVL much lower than other lending platforms (while optimizing revenue through interest). TVL for a pool could grow quite large if the asset is going or is expected to go down in price fast as the borrow balance will grow fast due to a demand to short the token. If the asset is going down in price, this won’t trigger liquidations. If the price is expected to go up, TVL may shrink because borrowing the asset would lead to losses.

Compound Open Price Feed

This oracle takes the price feed that the Compound protocol uses. The prices for this oracle are supplied by Coinbase Pro and are bounded by a maximum deviation from the UniSwap TWAP. More info can be found on the compound website.

Benefit: Quick response to fast price movements.

Risks: These are based on a single source (although with the UniSwap safeguard). This has created an issue before, causing about $90M to be liquidated. USDC and USDT are pegged 1:1 to USD. Compound may switch to another oracle solution at some point.

Chainlink Oracles

This oracle uses the publicly available Chainlink oracles that are “sponsored” by other protocols, such as Synthetix, Aave, bZx, etc.

Benefit: Some sort of weighted average from multiple sources, sourced by multiple reporters.

Risks: Because running each Chainlink oracle is quite expensive ($240k-$360k/year), most oracles currently rely heavily on sponsorship from the Chainlink team. Were they to stop paying for it, most Chainlink oracles would probably no longer be maintained. This introduces a single point of failure.

Benefits to Sushi Holders

There are three income streams in BentoBox Lending:

• A flat borrow fee of 0.05% of the borrowed amount as the funds are borrowed. All of this goes to the asset suppliers.
• Compounding interest paid by the borrower. 90% of this goes to the asset suppliers, 9% goes to the SushiBar and 1% goes to the developer.
• Profit made from “closed” liquidations. 90% of this goes to the asset suppliers, 9% goes to the SushiBar and 1% goes to the developer.

Launching BentoBox Lending

The smart contracts for BentoBox are currently under audit by Quantstamp and Peckshield. The Peckshield audit is wrapping up with all issues addressed. The Quantstamp audit will probably wrap up in early January. Good progress is being made on the UI. You can see the design for it here. And here you can see an early version of the design ‘coded’ into an actual webpage.

Realistically, I’m hoping to see the first release go out in mid January.

The first release will give access to the basic features of BentoBox Lending for a predefined set of collateral-asset pairs. Features such as creating new pairs, searching for pairs, moving liquidity between pairs, etc will be added over time.

The Road Ahead

BentoBox has been an awesome team effort and took longer than expected because we still had to set up a lot of scaffolding, like deployment systems and testing frameworks, etc.

Also, many in the team have never worked together before, so we took some time to find out the best ways to work together and communicate, etc. In the end, it’s become an amazing team effort from a team distributed across the globe.

Teamwork

The solidity code and tests originally written by me were tested, analysed, tweaked and fixed by Keno Budde (@clearwood on discord) and @johba. Deployment and testing were streamlined by Matthew Lilley (@I’m software on discord), who also introduced coverage testing and helped us get to around 95% test coverage so far.

The subgraph was put together by Keno Budde and Matthew Lilley.

The UI design was done by Chester LaCroix and Kastrye. The core team of LevX, @JiroOno and @OmakaseBar proceeded to work closely together to put together the different pieces that make up the UI.

Meanwhile @Miya has been preparing launch communications and 0xMaki lined up top firms Peckshield and Quantstamp to conduct the audits.

And I’m sure I’m forgetting some people and some parts here. But the point here is that we started out as a group of strangers. But by now, a real team that works closely and effectively together has formed.

Now that the team is all ‘warmed up’ we should be able to deliver more in less time. The following is my idea for a high-level roadmap for Sushi.

Lending Improvements

LendingPair variants

Currently, a lot of the parameters are hardcoded to what we think may be good for a medium risk token pair. Some pairs are riskier, so they may need larger safety margins. But a pair like DAI-USDC is a lot safer, so more leverage may be ok to allow.

We can add any number of ‘base’ contracts with different settings for the safety parameters, etc.

More Oracles

Anyone can create a new oracle interface to be used with Lending. Here are some that could be interesting to add:

• Uniswap V2 TWAP oracle — this is the same as the SushiSwap one
• xSUSHI oracle — this would allow xSUSHI to be used as collateral
• SLP TWAP oracle — this would allow for SushiSwap SLP tokens to be used as collateral. (same could be done for Uniswap LP tokens)
• cToken oracle — this would allow Compound Finance cTokens to be used as collateral, so you can farm COMP tokens on Compound and get interest as well as provide liquidity on BentoBox Lending. (Same can be done for C.R.E.A.M., Aave, etc…)
• Multiple feed oracle — Combine multiple feeds, such as SushiSwap, Compound and Chainlink
• Multiple AMM TWAP oracle — Combining the TWAP of SushiSwap and UniswapV2 into a single oracle.
• BentoBox asset supply token oracle — this is getting a little meta, but there are some interesting use cases for this for the larger pairs.

BAND Protocol

While currently not supported, we are investigating a way to get BAND oracles maintained at a very low cost (paid by those who benefit from keeping the price up to date, such as liquidators and large asset suppliers). At this point, this is still in an early stage of research, but this could lead to an affordable way to have a properly decentralized off-chain to on-chain oracle solution for BentoBox Lending.

Issue Synthetic Assets (such as Stablecoins)

Once lending is live, only a small change is needed to allow users to deposit collateral and instead of lending assets, they can mint synthetic assets. Oracles, liquidation, etc all work the same. When the synthetics are returned, they are burned and collateral is returned.

Initially, we could support xSushi as the main collateral, so you can be earning SUSHI while minting synthetic assets.

SushiSwap V2

By bringing SushiSwap into BentoBox we gain many advantages. Such as:

• Adding new pairs becomes much cheaper.
• Any rebasing token that supports the BentoBox Plus will support all pairs with that token.
• Extra income from putting idle capital to work.
• Extra income from flash loans.

Instead of just supported the standard curve AMM, we can also add support for pools with different ratios, such as 20:80. And for pairs such as USDC-USDT or WBTC-renBTC we can add a special curve that reduces slippage significantly.

We can also add some more experimental AMMs, such as one that only moves in one direction and can only backtrack a few percent. Or an AMM with a spread built-in.

BentoBox Plus

The current BentoBox is very safe, but only provides no returns on capital. A second BentoBox can be launched that provides the following upgrades:

Flash Loans

Earn extra income on all funds through flash loans.

Support for rebasing tokens.

When a rebasing token calls sync on the BentoBox, all funds within (regardless of which protocol uses them) automatically rebase correctly.

Strategies

For each token in the vault, a strategy can be specified that will invest the asset in a “safe” way to generate a return. Strategies used should only grow the value and should be able to be withdrawn instantly. We could also create a BentoBox Degen, that also allows more risky strategies, with higher returns.

These strategies will give you a return on your capital while it’s still 100% available to you to use in any of the BentoBox enabled protocols, such as lending and AMM.

ERC1155 Support

This ERC supports a single contract that “issues” multiple tokens. This way you could receive bTokens when you add tokens to the BentoBox. This is not so different from the way it currently works, but it currently doesn’t conform to the ERC1155 standard.

NFT Support

Currently, the BentoBox only supports fungible tokens. Adding support for NFTs opens a new range of possibilities as the use of NFT grows. You may for instance use an NFT as collateral. Some low value NFTs could be added to an AMM, such as common CryptoKitties, that are all of minimal, mostly equal value. And many use cases we haven’t even thought of yet. Currently, NFTs are mostly used to represent digital “goods”, but there are many more ways where NFTs may play a role in the DeFi eco-system.

The BentoBox eco-system

Because the BentoBox is an open platform, any protocol can use the BentoBox as their token storage and get all the benefits. We can add any missing DeFi legos, such as options, insurance, yield earning vaults and/or help existing protocols integrate. Some of the current Sushi products under development that can be added:

• MISO — A platform to launch new projects (https://forum.sushiswapclassic.org/t/proposal-miso-minimal-initial-sushi-offering/1309)
• Gusoku — Options-based IL protection
  https://hackmd.io/j70mou-pQ_KZ8lcDPrb1qA

Capital Efficiency

The holy grail of DeFi is to maximize capital efficiency and generate the highest yield with the lowest risk. Once the BentoBox has Lending, AMM, etc and the BentoBox Plus is live, here’s an example of how it could be used:

Let’s say you HODL ETH and BTC. You could add your WBTC and ETH to the BentoBox and provide both assets for Lending. This will give you lending tokens. These tokens could be placed in an AMM pair and they will be arbitraged by traders as the price of ETH-BTC moves (indirectly providing more liquidity to the overall on-chain ETH-BTC market). This will mint you SLP tokens for this pair. This could be supplied as collateral to borrow for instance USDC (or to borrow more WBTC and ETH to repeat the above and leverage this position).

This takes capital efficiency options to a whole new level.

Layer 2 — Scaling DeFi

There’s a lot of hype around “layer 2”, optimistic roll-ups, etc. But in practice, the major drawback for most of these solutions is that it’s expensive and/or slow to move between layer 1 and layer 2.

But once a lot of the eco-system is already running through the BentoBox, we simply deploy a BentoBox on layer 2. Once you’ve moved your tokens to layer 2 and into the BentoBox, you can stay in layer 2 while using all the cool protocols built on top of BentoBox.

Exciting Times Ahead

While we don’t know what the future might hold, at least we’ve got a lot of plans… I’m looking forward to working with the great team of Sushi to bring more cowbell :D

P.S. This is my personal view for Sushi. However, Sushi is owned and governed by the community. It’s up to the community to set the real roadmap and accept or reject all or part of this.

SushiSwap code is fully audited.

However, today’s post is not about us, but about silly FUD and their role in the DeFi community as a whole. When we were reading a silly hype article we had the MasterVampire smart-contract investigated as a potential target for hacking, we’ve noticed another bug, this time with more serious ramifications.

We want to describe the vulnerability and a potential backdoor that was left by mistake, and may get forked multiple times in different projects. The bug itself may lead users to have all their staked liquidity stolen. A potential attack based on this is hard to implement, and it takes special preparations, plus owner rights on the initial stage of the launch. But it gives the ability to drain all funds for anyone with admin rights. Even under multisig and governance, it’s extremely hard to notice anything malicious in common transactions.

MasterVampire contract has a deposit function that calls deposit in the VampireAdapter library. This deposit function uses delegatecall on the adapter contract.

Because of the delegatecall, the deposit function in the Adapter (or any new adaptor) is executed in the context of the MasterVampire.

Let’s understand why using delegatecall is irresponsible and possibly malicious.

Lost funds

Consider a malicious owner of the contract on the stage of deploying a new adapter for a very unpopular protocol, silently adds a few lines of code to the deposit function. This doesn’t look suspicious at all because nobody cares about this protocol, so nobody checks the new adapter code.

But let’s image what will happen if after, say, the TimeLock is finished and the pool is added. Barely anyone would have noticed these new pools being added, as people tend to believe it can only impact those new pools.

As a result, delegatecall to deposit will lead to the malicious owner stealing all funds from all pools.

FUD

Recently a silly FUD and hype article was read many times by many people, but nobody seemed to understand this was a total non-issue.

We believe that the severity of the FUD is at least on a high level. The fact that it was overlooked by the community raises some serious questions about the role of the community in DeFi.

The fix for this is pretty simple, and it’s implemented in the Sushi Community. One simply needs to not believe everything that’s written in technical reveal style articles on Medium.

Nevertheless, we still lack an official FUD whacker for our project and invite anyone to reveal FUD for what it is.

New OmakaseBar website is live for testing

All your Sushi needs in one place, that’s what the OmakaseBar brings. You can check it out now at https://sushiswap.fi/.

Besides this there are a lot of ways to play with Sushi:

• https://sushiswapclassic.org/ — The OG
• https://app.boring.finance/#/sushibar — Check the bar and timelock here
• https://sushiswap.levx.io/ — clean UI by community team LevX
• https://sushi.zippo.io/ — Check out the menu
• https://sushiswap.vision/home — Full stats
• https://sushiview.vercel.app/compare — compare Uni to Sushi
• https://sushi-balance.herokuapp.com/ — Your sushi overview

We’ve got a team!

After a tumultuous start, we had SBF and team step up and guide us through migration. Naturally they are pretty busy and can’t devote all their attention to Sushi full-time. With 0xMaki elected to lead the project by the community, he has assembled a team from the early contributors and volunteers who stuck with the project no matter what. The current full-time team:

• 0xMaki — Our fearless leader
• ctrl — Taking care of operations
• OmakaseBar & JiroOno — Making all the cool stuff (yet to be officially voted in, but seem to have community support)

There are of course many others working hard to making Sushi a success, such as:

• Chester LaCroix — working on branding/design
• Kastrye — working on branding/design
• Miya — streamlining communications, social, international
• BoringCrypto — tech, building BentoBox
• Countless others…

After the chaos of the first few weeks it took some time to get things sorted out and streamline things internally… we now have a strong team in place to take Sushi forward for the community.

All things multi-sig

All the dev funds are currently under control of the 6-out-of-9 community elected multi-sig with about $14m worth of SUSHI. All changes to the protocol is now controlled by a 3-out-of-5 multi-sig (0xMaki, ctrl, OmakaseBar, JiroOno and BoringCrypto) and behind a 48 hour TimeLock.

Menu of the Week

SushiSwap is introducing a rotating menu of reward pools. Today 9 pools went live and one more coming soon:

• xSUSHI-ETH 0x36e2FCCCc59e5747Ff63a03ea2e5C0c2C14911e7
• cDAI-DAI 0x0Cfe7968e7c34A51217a7C9b9dc1690F416E027e
• WBTC-ETH 0xceff51756c56ceffca006cd410b03ffc46dd3a58
• CREAM-ETH 0xf169CeA51EB51774cF107c88309717ddA20be167
• MEME-ETH 0x17b3C19Bd640a59E832AB73eCcF716CB47419846
• wNXM-ETH 0xFcff3b04C499A57778ae2CF05584ab24278A7FCb
• yUSD-ETH 0x382c4a5147Fd4090F7BE3A9Ff398F95638F5D39E
• yUSD-WBTC 0x2024324a99231509a3715172d4f4f4e751b38d4d
• CRO-ETH 0x0be88ac4b5C81700acF3a606a52a31C261a24A35
• renBTC-WBTC 0x518d6CE2D7A689A591Bf46433443C31615b206C5 (soon)

Growth Fund

The community has voted to provide the team with a growth fund topped up every month that will help the team to reward volunteers, pay for operational costs, run contests and many more things…

Partial Lock-Up of new rewards

Within a day we will implement a community proposal to lock up 2/3rd of harvested SUSHI for 6 months. It was also decided to cap the max supply of SUSHI to 250M.

The BentoBox lending solution

Platforms like Compound and Aave allow users to deposit assets as collateral and borrow other assets against this. These protocols have attracted billions of dollars, but they suffer from some major limitations. Taking away these limitations could see much larger adoption. BentoBox aims to do just that.

• Isolated lending pairs. Anyone can create a pair, it’s up to users which pairs they find safe enough. Risk is isolated to just that pair.
• Flexible oracles, both on-chain and off-chain.
• Liquid interest rates based on a specific target utilization, such as 75%.
• Contracts optimized for low gas.
• The supplied assets can be used for flash loans, providing extra revenue for suppliers.

And so much more!

Some things in the pipeline are rebalancing of the reward pools, setting a schedule to keep total supply under 250M, easy migration from UniSwap pools to SushiSwap pools, and a lot more… ganbarimasu!

What’s new in the SushiShop? was originally published in Sushi on Medium, where people are continuing the conversation by highlighting and responding to this story.

We solve these issues by having a platform with:

• Isolated lending pairs. Anyone can create a pair, it’s up to users which pairs they find safe enough. Risk is isolated to just that pair.
• Flexible oracles, both on-chain and off-chain.
• Liquid interest rates based on a specific target utilization, such as 75%.
• Contracts optimized for low gas.
• The supplied assets can be used for flash loans, providing extra revenue for suppliers.

Isolated lending pairs

The current solutions allow users to supply a variety of collateral assets and borrow another set of assets. If one of the assets were to drop in price faster than liquidators can react, every user and every asset is affected by this. So the risk to the platform is based on the risk level of the riskiest asset listed on the platform. This risk increases with every extra asset that is added, leading to a very limited choice in assets on most platforms.

By isolating lending pairs, anyone can create a new pair similar to how anyone can create a SushiSwap pair. Some lending markets will be very stable and safe, others not so much if they include highly volatile assets with low liquidity. Because these are isolated pools, risk is limited to individual pools and interest rates will reflect that risk. Higher risk pools will attract less suppliers, pushing up the interest rate.

Margin shorting any token

This will allow for the creation of thousand of lending pairs for any token, creating the ability to go margin short on a large variety of tokens. This is something that is in high demand, but currently not available for most tokens.

Let’s say there’s a shiny new token called SHINY. We want to short this because we think it’s overvalued because it’s so shiny and new. We (or someone) create an ETH-SHINY lending pool, with a collateral rate of 80%.

We supply $1000 worth of ETH and borrow $750 worth of SHINY. We sell the SHINY for ETH and supply the ETH back to the pool. Now we have:

Supply: $1750 ETH and Borrows: $750 SHINY

We borrow an extra $500 SHINY and sell it for ETH. We resupply the ETH and have:

Supply: $2250 ETH and Borrows: $1250 SHINY

We can repeat this process a few more times, or we could have use a simple flash loan to get this done in 1 transaction. Depending on the collateral rate we can leverage 2–4x or more depending on our risk profile.

Now we are not only able to short this brand new token (which currently is often not possible) but we can even leverage the short. This will lead to a lot of volume on the associated swap pool, which we would encourage to of course be SushiSwap.

Flexible oracles

When a pool is created an oracle can be selected. I will provide 2 basic oracles, but the system can be extended and anyone could write a connector to an oracle. The basic oracles provided are:

• SushiSwap (UniSwap V2) Time Weighted Average Price — every SushiSwap and UniSwap can be used to get a TWAP.
• Open Oracle Price Feeds — these are the feeds Compound uses.

Liquid interest rates

Ideally you’d prefer a high, but not too high supply to borrow ratio (e.g. around 75%). The current platforms try to achieve this by making the interest rate go up with increase utilization. The minimum and maximum rates are however fixed. So these platforms don’t optimize towards an ideal utilization. During very low or high demand the rates have to be adjusted manually to get the utilization rate corrected. When utilization hits 100%, withdrawals are no longer possible. This problem has occurred on several of the platforms.

Each pool (and in each direction) will optimize the interest rate to get to the ideal utilization. If the pool is underutilized, over time the interest rate will keep dropping until it reaches 0% or until enough supply has left/borrowers have arrived. As the utilization goes too high, the interest rate will start climbing until it’s back at the ideal rate. The parameters for this will be configurable for each pool.

Optimized for low gas use

Most of the current implementations use quite a lot of gas, making them useless to users with smaller portfolios during high gas prices. One reason for this is that the contracts aren’t optimized for gas. A more fundamental reason is that having multiple assets supplied/borrowed requires more computation that gets worse the number of assets you enable. More recently some platforms have integrated governance tokens. This adds even more gas usage to each interaction with the platform.

Areas of more research during development

These features aren’t guaranteed, but will be researched as part of the development.

Allow for the investment of the locked funds in reputable yield zero-loss yields creating protocols. This should probably be optional per pool, so there can be multiple versions of the same pool pair. Users can trade of risk against rewards.

It may be possible to create one or more vaults that hold the actual assets. So while the pools are still separate from a risk perspective, this allows for easier investment of locked funds to create extra yield, larger flash loans and most importantly it could make moving between pools very low gas so liquidity can easily flow to the best pools. There are some drawbacks too and more research is required.

Revenue generation

A set percentage (to be set and controlled by Sushi) of the lending LPs interest proceeds will be sent to the SushiMaker. These will be converted into SUSHI and served in the SushiBar to holders of xSUSHI.

Who am I?

• Starting coding at the age of 6, hence 36 years experience coding in about every language and on every platform from large databases, accounting software to HFT and 3D engines.
• Successfully built and exited multi-million dollar internet company.
• Founder, architect and main coder on full CEX focused on security and transparency.

Background

Before I got involved helping out with Sushi, I spent weeks working on this lending solution. With the appointment of 0xMaki, ctrl and most likely OmakaseBar I feel confident about the future of Sushi and would be interested to bring this in under the Sushi brand.

Proposal

I will commit to delivering well tested (but not yet audited) solidity contracts closely matching the specs above. Slight changes may occur due to technical feasibility, but will be clearly communicated when encountered.

The success fee for this project is 25k SUSHI at the beta release and an additional 75k at final delivery.

Any costs of freelancers I may use for things such as creating unit tests, etc and any other expenses I have will be mine. The core code will of course be written by me.

Delivery deadline for a beta release will be 3 weeks from the time the funds are approved. Final delivery will be within 6 weeks. Every day delayed after that will reduce success fee by 5%.

While I may create a UI for testing purposes, it isn’t included in this proposal. But I will work with the team and provide help/guidance where needed so a good UI can be ready for launch.

License

Code will be open source, but full copyright will be retained by BoringCrypto. A perpetual unrestricted license will be granted to Sushi but only for the use within the Sushi ecosystem.

Uniswap liquidity that is staked in one of the pools of the MasterChef (such as 🐢Tether Turtle) will be moved to SushiSwap.

Let’s say you add 1 ETH and 340 USDT in the UniSwap pool and receive some UniSwap V2 LP tokens. You then stake these tokens with the MasterChef to farm SUSHI. At migration, technically all tokens in a pool are migrated at the same time in one atomic transaction.

But from your perspective your UniSwap V2 LP tokens (representing your liquidity of 1 ETH and 340 USDT) will be migrated into SushiSwap SLP tokens representing exactly the same liquidity.

These SushiSwap SLP token work the same way UniSwap V2 tokens work. There will be one or more sites available where you can add/remove this liquidity from the pool, trade and stake.

When is migration happening?

Migration is possible from anytime after Wednesday September 9 14:10:32 UTC. SBF will call the migration function on the MasterChef contract one by one, so all pools will be migrated soon after the time above. The first pool to be migrated will be CRV/ETH. SBF will check that it all went smoothly and then do all the others.

What happens to my SUSHI? 🍣

Nothing. All farmed and pending SUSHI will stay the same and you’ll continue to farm SUSHI for your staked liquidity.

Has this been tested? ⚗️

The contracts for migration were audited by Quantstamp and Peckshield. No critical issues were found. BoringCrypto has done a successful test migration on the Ropsten testnet.

Is there a reward for staying in? 🏆

SBF is giving out 1 million $SUSHI for those who continue to provide liquidity through migration. This will be distributed evenly to all liquidity providers based on the USD value of liquidity.

There is currently a community proposal to use 1 million $SUSHI from the development fund to bring the total rewards to 2 million $SUSHI.

What is happening with the AMPL and BASED pools?

Because AMPL and BASED tokens are elastic supply tokens. To work correctly the token has to specifically support the liquidity pool. Technically this is done by the token calling the sync() function on the liquidity pool when a rebase is done. AMPL will support the SushiSwap pool and will be migrated as planned. Unfortunately it looks like BASED is unable provide support and will therefore NOT be migrated and stay on UniSwap.

Because BASED will not be migrated, there won’t be a reward for staying in that pool through migration. BASED pool will continue to farm $SUSHI. The AMPL liquidity providers will be rewarded just like the other pools.

What will happen to UniSwap fees?

You will receive all fees earned up to migration as they are continuously added to the pool. Once migrated to SushiSwap the fee will also be 0.3%, however 0.25% will go to liquidity providers and 0.05% is designated to be sold for SUSHI and the SUSHI will be paid to those who stake in the SushiBar. More on this later.

What happens next?

After migration is complete, the liquidity will be available on SushiSwap and anyone can start adding other trading pairs and start trading.

We are already supported by Debank Swap and 1inch to increase order origination more will follow !

Check the on-going 48H countdown for @SushiSwap migration in our p-folio tracker. - Trading on #SushiSwap is already supported in DeBank Swap. Let's wait and see @SBF_Alameda @0xMaki https://t.co/bxri8hNeQd pic.twitter.com/Gma68qMkXx

1inch is getting ready for @SushiSwap 🚀🔥🎂#DeFi pic.twitter.com/uMhbg98iQ3

The next steps include :
- Deep integrations with DeFi partners
- Launch of our governance forum on September 10th
- Launch of more frontend from community developers and designers !
- Updated grants and Sushinomics 🍣😉

いただきます

💬 Join Us!

• Join discussion in our Discord at https://discord.gg/BRXwF8Cf
• Don’t miss any update by following our twitter at twitter.com/sushiswap

Migration FAQ was originally published in Sushi on Medium, where people are continuing the conversation by highlighting and responding to this story.