Call to Prayer #20

Call to Prayer #20 occurred on Sunday June 26, 2022, at 6:00 pm EST. Click here for the Chinese Translation.

For a tl;dr, you can check out this Twitter thread.

TEMPLE CORE VAULTS UPDATE

  • The temple core UI now displays projected APY dynamically instead of a static number.
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APY is a projection only which has to factor in market price, farming yield and TVL in vaults.
  • The first Vault cycle ends in two weeks.
  • Currently all yield will be paid in $TEMPLE bought from the AMM at market price.
  • Mechanism to mitigate any front-running in dilution will be announced soon.

While the current yield payment mechanism involves market buying TEMPLE from the AMM the team’s ongoing focus is on figuring out a more efficient way to pay people their yield. The key is not to drive unnecessary dilution. Options include:

  • Minting TEMPLE directly
  • Buying off AMM at market price (current mechanism)
  • Buying with a TWAMM
  • Running an auction

But as these are being debated, for now, you do not need to do anything except continue to stake and chill. Expect a medium on this to be announced soon.

STAX UPDATE

  • Our whiletlist snapshot on FRAX has passed. STAX will be able to stake and lock FXS on the FRAX gauge.
  • One of the visions for STAX is to drive utility for TEMPLE by opening curated gauges for TEMPLE-dominated LP pairs, such as DAI/TEMPLE, FEI/TEMPLE, HONEY/TEMPLE, and FRAX/TEMPLE
  • Other strategies are being explored, such as staking vaults and potentially other revenue-sharing agreements with DAOs such as Yearn and maybe Pickle.
  • We foresee a bribe system where different protocols are bribing STAX holders to direct emissions to their gauge (similar to the convex model)
  • The central concept of STAX currently is that it converts LP tokens locked in the FRAX gauge into a wrapped (liquid) version. If you choose, this wrapped xLP token can then be traded for the original LP token on the open market. We are working to integrate all of that on the STAX platform itself
  • We see a lot of synergy and mutual benefit for stablecoin issuers to partner with Temple and get additional benefits from our unique position of having a relatively stable price, floating between IV and book value. We also have more flexibility from not being pegged to $1. These benefits could come from DAO lending or safe leverage with a reduced risk of impermanent loss.
  • We can also diversify the stablecoin holdings in our treasury. After performing the necessary risk assessment, we can even open long or short positions on our holdings if we feel that's appropriate.

Temple Governance/DAO game

We’re currently working on a governance structure integrated with discord that we call the DAO game. This is a way for Templars to rise through the ranks as they add value with a higher degree of decentralization.

The way it works is that as people contribute they get recognized and credited in the DAO game, eventually leading them to be given a role on the team and later promoted.

We will also begin to pay team members using a bounty system based on their contributions each epoch.

We believe this system will ultimately be far superior to other forms of DAO governance such as direct snapshot voting, which can lead to a few large holders holding everyone else hostage.

Q: Can we still stake and chill? Because we were with "OGTEMPLE and then you changed it

The shift we made away from the rebase model to the revenue sharing model was represented by the shift from OGTEMPLE to the CORE vaults. OGTEMPLE currently yields 5% to holders, but this will go down over time.

This major pivot aligned with our philosophy from the beginning of providing sustainable yield to Templars. We don't anticipate another shift of this magnitude any time soon. We just had to make this shift much faster than we expected.

Q: When can we start locking TEMPLE for longer periods and receive a higher APY bonus?

Longer-term vaults are in the works. We'd like to see vaults of three, six, or maybe even twelve-month. We believe we're well-positioned to offer people a low-risk investment over longer time frames. We're built on a strong foundation with FRAX, and we've now begun to offer yield that is fully sustainable. Our team will release this as an update soon. However, a few other CORE updates are currently taking priority over this, like improving automation and yield payment calculation.

Q: Are there things that could cause danger in the future? And what are these risks? How does the team prepare for it?

Our contract structure has a unique feature that separates the "investing" and "accounting" of the protocol. This adds a layer of protection. Any attack or hack on the vault architecture doesn't impact the underlying investments.

Our investments are also very conservative. Convex/Curve and FRAX are low risks compared to the rest of DeFi. We have more transparency in the way we invest with our treasury than any other DAO. Our wallets are public. We have real-time reporting in discord. Bobruisk, our treasury manager, publishes weekly profit and expense reports. This is unheard of and unmatched by the rest of DeFi.

Q: How do we plan to increase the TVL of vaults? Any marketing? Right now, not all Temple is locked in vaults. Do you think investors have concerns about locking for a month with the current market sentiment?

Many people are still chilling with OGTEMPLE, and as they migrate across, it increases the TVL in our vaults. The sentiment in general is TEMPLE is a safe place to be. We want to build trust in the vaults progressively over time and continually build and improve our products.

Q: Wen Temple Lending?

One avenue we are looking at now is to do lending at the DAO level. Meaning the TEMPLE you lock into our vaults will be levered up without the user having to do anything themselves. This will also increase efficiency and decrease gas costs.

We had very productive talks with RARI and FEI and had $50M-$60M worth of leverage lined up, but then both these protocols ran into major difficulties as everyone knows, so we are pausing that for now.

Q: Any updates on the plan to go crosschain?

We are still working on migrating Temple to other chains, but we want to make sure we get it right. Moving to other chains could be a great way to get some extra leveraging strategies along with other opportunities. It increases the smart contract risk depending on the chain we move to. We have been in close contact with the Berachain people and they joined us for one of our CTPs to answer questions about their protocol and discuss our possible partnership. We still like that chain, but we'll see where the opportunities are, and if we spot an excellent deal, we'll bring it before the community.