IntoTheBlock has updated the Risk Management Tools grant proposal below (initially posted on March 9, 2023) to clarify the following sections:
- Key terms section is added, providing a link to an example gitbook of how ITB will develop documentation for all indicators that are developed for the proposed dashboard.
- A defined grant request amount and a cost transparency document is provided to outline how the grant resources will be used.
- The estimated Timeline, Deliverables, and Milestones of the project are defined with specifications of the types of technologies that will be used to develop and deploy the dashboard.
Abstract
IntoTheBlock (ITB) is requesting a grant from the Radiant DAO to build risk management tools for Radiant and its community. A risk dashboard will be hosted on ITB’s recently-launched Risk Radar platform providing open access for anyone to monitor the custom built risk indicators for Radiant free of cost. In addition to the charts and graphics generated in the risk dashboard, users will also be able to download CSV files for all metrics and go through extensive documentation to better understand them. Finally, Radiant DAO core contributors will also be able to access the data for these indicators near real-time via API.
About ITB
ITB was founded in 2019 and is one of the largest crypto market intelligence providers. We have support in our app for custom analytics for more than 9 blockchains, +1000 coins, +5000 NFT collections, and 10 DeFi protocols, as well as other traditional finance metrics. Our analytics are available for both retail users and institutions, integrating with partners such as Binance, CoinGecko, CoinMarketCap, Bitstamp, Deribit, Decrypt, Coindesk, and Tradingview, in addition to 300+ other companies.
Over the past two years IntoTheBlock has been heavily involved in DeFi. This started with the launch of DeFi Insights analytics and has grown significantly through our Institutional Quantitative Strategies (ITB Quant) service. ITB’s DeFi Quant platform acts as a gateway used by 20+ of the largest crypto institutions to access DeFi yields via sophisticated non-custodial strategies with appropriate risk management models.
To help streamline institutional and individual adoption of DeFi, IntoTheBlock decided to make risk metrics and models accessible via APIs and analytics dashboards through our recently launched Risk Radar Platform. The goal of the Risk Radar is to help protocols and their users transparently monitor the health of a DeFi protocol and make proactive decisions about their economic risk conditions.
Motivation
The specific goal ITB aims to achieve for the Radiant grant proposal is to build a risk dashboard that monitors economic factors that can have an impact on Radiant users and the protocol at large. The indicators in the Risk Radar dashboard will improve Radiant by providing near real-time data on economic risks inside the protocol, such as overall health factor of whales. Additional indicators like liquidation history and a liquidations leaderboard, provide the community with insight into the health of the liquidation process on Radiant.
The foundation of the DeFi risk monitoring engine is ITB’s expertise and experience safeguarding hundreds of millions into DeFi for institutional partners. This is why Euler, Benqi and other upcoming protocols have partnered with ITB to provide economic risk indicators for their lending protocols. We believe that these tools would allow Radiant’s community to track economic risks that can affect the protocol and help substantially reduce risk exposure.
Rationale
Outside of the technical risks that are inherent to DeFi smart contracts, economic risks are also present for users when managing their positions on a protocol. Within lending protocols, these lending risks can impact the Radiant community through liquidations or bad debt.
DeFi teams can work hard to mitigate technical risks associated with their protocol, but economic risks can still persist. ITB’s Risk Radar can help Radiant and the community by providing an additional risk management tool that monitors these economic risks that can’t be mitigated through traditional smart contract auditing. ITB’s CEO recently wrote an article on how some of the ITB risk indicators can be used to monitor liquidations in a lending protocol.
Institutions and DAOs that work with ITB rely on the indicators that we provide to help them make their decisions on where to deploy their capital. With all the risks that pertain to capital deployment in DeFi, ITB believes that the Risk Radar can boost institutional and individual investors’ confidence in the economic security of Radiant. This will become ever more important with the imminent launch of Radiant V2 and the new assets that will be onboarded when expanding to new blockchains.
Key Terms
As many of the risk indicators mentioned in the proposal are unique to ITB and are not found on other analytics providers, users might be unfamiliar with some of the indicator names. For this reason, ITB will have documentation and examples on how to interpret each of the indicators. An example of this documentation can be seen in the Benqi Risk Radar GitBook. A shorter description of each indicator can also be found in the risk indicator list.
Specifications and Steps to Implement
ITB is requesting $60,000 to enable near real-time economic risk monitoring and analytics for the Radiant protocol. Specifically, the grant will cover the following deliverables:
- Risk API: REST API enabling access to all the proposed indicators.
- Risk dashboard: Web interface that includes visualizations of the risk indicators.
- Documentation and use cases: Complete documentation of all risk indicators included in the release and practical explanations on how these can be used.
The full breakdown of the platforms and technologies that will be used to build the Radiant Risk Radar can be found in our costs transparency document. In addition to the technologies used for the product, it breaks down ITB’s estimated labor and infrastructure costs by category.
Proposal Milestones & Payments
ITB is requesting payments to be structured by milestones along with an initial set up fee in the following way:
- Upfront payment ($10k)
- Indicators 1-10 (dashboard + API) ($15k)
- Indicators 11-20 (dashboard + API) ($15k)
- Documentation covering Radiant’s risk dynamics ($10k)
- Quarterly upgrades and maintenance, such as adding new tokens, modifying metrics based on feedback, covering infrastructure costs, and integrating new chains ($10k)
These indicators are subject to modification based on feedback from the community and Radiant’s team. Indicator development is proposed in two phases so that a dashboard is available faster with an initial portion of the indicators. However, these milestones can be combined so that the full dashboard is released all at once. ITB is committed to maintain and expand the capabilities of the Radiant Risk Radar as Radiant expands its markets to new tokens and chains.
Timeline
The aim would be to have the Radiant ITB Risk Radar product available with these proposed indicators one to two quarters after the grant terms have been agreed upon.
Overall Costs
As stated in the specifications section, ITB is requesting a grant for $60k. ITB has built similar offerings for the Euler and Moonwell protocols within the range of $60k to $85k. This is intended to cover developer and infrastructure costs. For the Radiant proposal we estimate a similar cost.
We value the community’s feedback and would be committed to finding an offering that works for the Radiant protocol and its users.