[GRANT REQUEST] | pZEIP-1_M2: BundleSwapFeature (31Third)

[GRANT REQUEST] | pZEIP-1_M2: BundleSwapFeature (31Third)

Update

Milestone 1 of the BundleSwapFeature development is complete. This grant request is to support milestone 2.

A report on the progress and learnings from milestone 1, and a description of milestone 2 can be found here.

The snapshot vote for milestone 2 is here.

Note: 0x Improvement Proposals (ZEIPs) describe standards and protocol specifications for the 0x protocol. This grant request will leverage an accelerated process described here to resource the development of a preliminary ZEIP (pZEIP), where the forum discussion and snapshot will run concurrently for five (5) days. If the snapshot passes, the grant proposal will be submitted for an onchain vote.

Summary

This pZEIP aims to enhance the 0x Protocol by deploying a Bundle Swap Feature (BSF), resulting in a new feature for the 0x Protocol core infrastructure and utility for integrators and end users. By enabling the execution of bundled trades in a single transaction, the BSF will streamline the process for on-chain mutual and index fund providers, reflecting the significant role of index funds in traditional finance within the DeFi space. This feature is restricted to ERC20 tokens and does not support NFT orders.

Links

Github: Github
Snapshot: Snapshot
Milestone 1 Discussion: Forum

I voted no on this proposal for follow reasons:

  • I now believe governance money should be directed to retroactive funding, so following my new understanding, all upfront governance initiatives will have my negative voting, only receiving a positive answer if benefits outweights the costs, which is not the case.

  • ZEROX pathways received a good sum of money, if they believe their ZEIPs are good for the protocol, they should fund them with the money they already received, and then seek retroactive funding, happy to vote yes on this case.

  • Delegates proposing and working on these proposals are keeping voting yes, turning governance voting a bit bad in external eyes, they should abstain as they have direct interest on these proposals.

This proposal was a good candidate for retroative funding, build first, get adoption, receive for what was contributed, this way we avoid giving away money for projects we don’t know if they will receive any meaningfull volume and we avoid adding extra vector attacks on 0x protocol on experiments.

UPDATE: In accordance with the experiment design described here, the Snapshot vote has passed, and the proposal has been submitted for an onchain vote, which will be active on or around 3/22/2024.

Discussion regarding the merits of the proposal remains open here.

In my opinion, this snapshot vote is a shame. It only passed because the two delegates that are proposing it, are voting on it. ZRX governance should be redesigned, two delegates are able to pass any proposal atm, and they have no shame in voting on their own proposals.

Dear João,

Thank you for your comments. We can’t really address most of your concerns, as they are not directly related to our proposal but we will still provide you with our point of view.

Firstly we have to clarify who is proposing this proposal. As stated in the headline, this pZEIP is proposed by 31Third and not Nikita or Sha. They’re both responsible for ZRX pathways and therefore are assisting with the process like posting the proposal in the forum but also submitting it to an on-chain vote. The only indirect connection is that Sha is doing reviews of the written code because he wants to understand what’s going on and we’re discussing security topics together to deliver the best possible result. Additionally, we’re also documenting our findings so that future pZEIP can benefit from them.
Everybody else is also very welcome to review the code and it would even be highly appreciated by us.

What we can definitely comment on is your concern regarding meaningful volume and market validation:

  • We at 31Third have now closed an integration deal with Enzyme Finance In January. Enzyme is the largest decentralized asset management protocol, who was looking for a multi-asset batch trading functionality to provide more advanced rebalancing options to their portfolio vault managers. No DEX aggregator currently offers this.

  • Another strong argument for market validation is Bebop (https://bebop.xyz/), a DEX incubated by Wintermute that focuses on batch trades. Currently, Bebop has 10% of the daily trading volume of the 0x protocol and is growing rapidly. 70% of Bebop’s volume is in multi-asset swaps (“1 to many” or “many to 1”). This means that Bebop already executes 7% of the 0x protocol’s daily volume in batch trades. (Source: https://dune.com/alekss/bebop)