GP 10: Reallocate previous Kyberswap inventory

Proposal confirmed and executed in the following transactions:

• Ethereum

  • Safe transaction #13

  • Ethereum tx: https://etherscan.io/tx/0xdcf96c97c5340f0023d2cd378b0d1e89b3433cb24817260103a4c7fff84446df

• BNB Smart Chain

  • Safe transaction #9

  • BNB tx: https://bscscan.com/tx/0x337deca24b6bcd018b785edd4e6efe788dd4125ebf110d83495d649a2d9bc0ab

Proposal Objective

Following GP 9, an emergency proposal to remove inventory from Kyberswap pairs on Mainnet and BNB chain, adjustments and reallocation of funds are proposed in this GP. The result will be a redistribution to several Uniswap pools and removal of some BOB from inventory. The overall decrease of total supply after this proposal is -3m BOB (52.5m → 49.5m).

Mainnet

1. Move Kyberswap USDT/BOB 0.008% inventory funds into Uniswap V3 USDT/BOB 0.01% inventory (2,000,000 BOB).

2. Remove 2,000,000 BOB from Kyberswap USDC/BOB 0.008% inventory as the Uniswap V3 USDC/BOB inventory already holds a sufficient amount of funds.

BNB Smart Chain

1. Move Kyberswap USDT/BOB 0.008% inventory funds into Uniswap V3 USDT/BOB 0.01% inventory (2,000,000 BOB)

2. Move Kyberswap USDC/BOB 0.008% inventory funds into Uniswap V3 USDC/BOB 0.01% inventory (2,000,000 BOB)

3. Remove 1,000,000 BOB from Kyberswap BUSD/BOB 0.008% inventory, as BUSD is being gradually deprecated.

Moving Funds

Moving funds between inventory pairs requires several system swap transactions throughout the execution, since the funds are stored and allocated in different proportions (this is a limitation of existing AMM protocols like Uniswap or Kyberswap).

To facilitate the swaps in this proposal, customized 1inch limit orders using a separate one-time helper contract are constructed. Following successful proposal execution, 1inch resolvers or other BOB counterparties will asynchronously fill the orders.

Proposal and Transaction Breakdown

Since the proposal consists of changes on 2 different networks, there are 2 different transactions explained below.

Ethereum Mainnet

Transaction #13 in the Safe on Mainnet contains 6 actions:

Action 1

Approve 1,999,985 BOB (18 decimals) for inventory allocation into Uniswap V3 BOB/USDT 0.01% inventory pair through the helper contract counterparty. 0xCDAD0ad4DD1F614a6502043Ef546e447b25Ffb99

Action 2

Approve 15 USDT (6 decimals) for inventory allocation into Uniswap V3 BOB/USDT 0.01% inventory pair through the helper contract counterparty 0xCDAD0ad4DD1F614a6502043Ef546e447b25Ffb99

Action 3

Mint part of the inventory BOB/USDT position through the helper contract counterparty. The action is executed by calling mint on the helper contract 0xCDAD0ad4DD1F614a6502043Ef546e447b25Ffb99

During simulations, this action results in 1,999,985 BOB + 0 USDT allocated into the inventory position. However exact amounts might change with Uniswap pool state changes. The helper contract will make sure to create two 1-to-1 limit orders for the remaining funds. During the initial simulations, this action resulted in 15 USDT → 15 BOB limit order being created.

Once the limit order is filled, swapped tokens will be automatically and atomically added into the existing inventory position. This will happen asynchronously following proposal execution.

See additional verification for simulation examples.

Action 4

Approve 38,190.381903 USDC (6 decimals) to the BobSwap 0x15729Ac1795Fa02448a55D206005dC1914144a9F contract for conversion to BOB.

Action 5

Convert 38,190.381903 USDC (6 decimals) into 38,190 BOB (18 decimals) through BobSwap 0x15729Ac1795Fa02448a55D206005dC1914144a9F. A commission of 0.381903 USDC is paid for this swap to BobSwap.

The action is executed by calling buy on the BobSwap contract. 0x15729Ac1795Fa02448a55D206005dC1914144a9F

Action 6

Remove 2,000,000 BOB (18 decimals) from prior Kyberswap BOB/USDC 0.008% inventory (send to null address).

Part of the removed funds effectively come from Action 5.

Note: The inventory position use tick range: [-276325, -276323], as BOB has 18 decimals and USDT has 6 decimals

BNB Smart Chain

Transaction #9 in the Safe on BNB Chain contains 6 actions:

Action 1

Remove 1,000,000 BOB (18 decimals) from prior Kyberswap BOB/BUSD 0.008% inventory (send to Null address).

Action 2

Approve 2,000,000 BOB (18 decimals) for inventory allocation into Uniswap V3 BOB/USDT 0.01% inventory pair through the helper contract counterparty 0x0eF655F7Cee3D430302BC7D3d491aF295CB40401

Action 3

Approve 108,200 USDC (6 decimals) for inventory allocation into Uniswap V3 BOB/USDC 0.01% inventory pair through the helper contract counterparty. 0x525b4E120dDC602fF055Aa86803acD7D71F0c753

Action 4

Approve 1,891,800 BOB (18 decimals) for inventory allocation into Uniswap V3 BOB/USDC 0.01% inventory pair through the helper contract counterparty 0x525b4E120dDC602fF055Aa86803acD7D71F0c753

Action 5

Mint part of the inventory BOB/USDT position through the helper contract counterparty. The action is executed by calling mint on the helper contract 0x0eF655F7Cee3D430302BC7D3d491aF295CB40401

During the initial proposal simulations, this action results in all 2,000,000 BOB + 0 USDT being allocated into inventory position. However exact amounts might change with Uniswap pool state changes. Helper contract will make sure to create two 1-to-1 limit orders for the remaining funds.

Once the limit order is filled, swapped tokens will be automatically and atomically added into the existing inventory position. This will happen asynchronously after the proposal execution. See Additional verification for simulation example.

Action 6

Mint part of the inventory BOB/USDC position through the helper contract counterparty. The action is executed by calling mint on the helper contract 0x525b4E120dDC602fF055Aa86803acD7D71F0c753

During the initial proposal simulations, this action results in all 1,891,800 BOB + 7,435 USDC being allocated into inventory position. However exact amounts might change with Uniswap pool state changes. The helper contract will make sure to create two 1-to-1 limit orders for the remaining funds. During the initial proposal simulations, this action resulted in 100,765 USDC → 100,765 BOB limit order being created.

Once the limit order is filled, swapped tokens will be automatically and atomically added into the existing inventory position. This will happen asynchronously after the proposal execution.

See additional verification for the simulation example.

Note: Both inventory positions use tick range: [-1, 1], as both tokens have 18 decimals

Additional verification

Inventory LPs validity can be verified using the following simulation test -https://gist.github.com/k1rill-fedoseev/8537cc9a3f1753b0d579e1af662834bb

Verify logic of helper contracts facilitating inventory minting and limit orders execution:

• Mainnet BOB/USDT inventory minter 0xCDAD0ad4DD1F614a6502043Ef546e447b25Ffb99

• BNB BOB/USDT inventory minter - 0x0eF655F7Cee3D430302BC7D3d491aF295CB40401

• BNB BOB/USDC inventory minter - 0x525b4E120dDC602fF055Aa86803acD7D71F0c753

Extra notes on Uniswap-related math: Uniswap V3 Math Nuances