**Summary:**

Proposal to add dfxCAD/CADC Factory Pool to the Gauge Controller to enable users to assign gauge weight and mint CRV.

dfxCAD is a fractionally backed stablecoin developed by DFX,a protocol bootstrapping the DeFi ecosystem for non-USD economies.

CADC is a fiat-backed stablecoin (based on USDC) issued by PayTrie (a fiat on-ramp) in Canada.

This proposal is submitted by DFX. It is in DFX's interest to promote deep liquidity for dfxCAD and CADC in order to advance the non-USD stablecoin ecosystem.

**References/Useful links:**

#### dfxCAD

Source: https://github.com/dfx-finance/asc/tree/main/src/dfx-cadc

#### CADC

- Website: https://paytrie.com/cadc
- Source: https://etherscan.io/token/0xcadc0acd4b445166f12d2c07eac6e2544fbe2eef#readProxyContract
- Communities:
- Discord: https://discord.gg/nkfA2Rr
- Twitter: https://twitter.com/PayTrie/status/1354507846491262976
- Medium: https://medium.com/paytrie
- LinkedIn: https://www.linkedin.com/company/19034415

#### DFX

- Website: https://dfx.finance/
- Documentation: https://docs.dfx.finance/
- Github Page: https://github.com/dfx-finance
- Communities:
- Discord: https://discord.dfx.finance/
- Twitter: https://twitter.com/dfxfinance
- Telegram: https://t.me/DFX_Finance
- Medium: https://medium.com/@dfxfinance
- LinkedIn: https://www.linkedin.com/company/dfx-finance

**Protocol Description:**

> Describe the proposed asset(s), the corresponding protocol(s), and historic prices of the token (price must come from the source of highest liquidity).

CADC is an ERC20 token, based on a fork of USDC FiatTokenV2, backed 1:1 by real Canadian Dollars. Each CADC is issued by PayTrie, a registered Money Services Business (M19690633) regulated by FINTRAC, Canada's financial intelligence unit.

CADC’s price history is tracked [here on CoinGecko](https://www.coingecko.com/en/coins/cad-coin). Historically, CADC has kept its peg true to the Canadian Dollar. DFX is an AMM with optimal pricing using a Chainlink oracle, and thus ensuring on-chain prices extremely close to the underlying Canadian Dollar. The anomaly in the CoinGecko chart is an error due to inverting the pair (i.e. USDC/CADC instead of CADC/USDC). This has been reported to CoinGecko and they are working on it.

DFX is also an interested party to this proposal due to its mission to grow the non-USD stablecoin ecosystem. Two of the founders of DFX are also founders of PayTrie, the issuer of CADC.

All PayTrie and DFX founders are public (please see LinkedIn link above) and previously worked at ConsenSys, UMA, and the Ethereum Foundation. DFX has also already seeded $478K of assets into the CADC/USDC pool and has purchased and locked $150k worth of CVX to promote future incentivization and signal commitment to the Convex/Curve community.

**Motivation:**

> Explain why this pool needs incentivization

The usefulness of a stablecoin directly correlates to its availability throughout the market. Compared to the Canadian dollar’s presence in traditional financial markets, a Canadian dollar stablecoin does not have deep liquidity in DeFi yet. Curve being a cornerstone protocol, an incentivized inclusion on Curve provides visibility to CADC and brings a mature ecosystem with existing integrations to other protocols. Curve incentivization would help CADC reach critical mass to become a fiat-backed alternative to USD within DeFi and provide further diversification to DeFi as a whole.

Independent of crypto market sentiment, stable swaps are also useful in various hedging strategies and for large institutional-level transfers. We believe these pools will naturally accumulate liquidity over time and facilitate outsized swap volume to their TVL.

As for DFX, an additional CADC pool creates opportunities for the market to arbitrage and for DFX to provide other exploratory services. This will increase adoption of alternate currencies outside of the US dollar and provide additional utility for those living and utilizing Canadian dollars in DeFi.

**Specifications:**

1. **Governance:**

> Provide current information on the protocol’s governance structure. Provide links to any admin and/or multisig addresses, and describe the powers afforded to these addresses. If there are plans to change the governance system in the future, please explain.

The CADC token contract was deployed by PayTrie and its current “Owner” role is the PayTrie multisig wallet: 0x3E30d340C83d068d632e11B5a30507ce973D7700. Similar to USDC, the owner of the CADC contract will have the ability to blacklist accounts with stolen tokens.

*ADD GOVERNANCE PROCESS FOR dfxCAD*

2. **Oracles:**

> Does the protocol rely on external oracles? If so, provide details about the oracles and their implementation in the protocol.

CADC does not use any oracles in its implementation as CADC is a fiat-backed stablecoin. However, CADC’s largest pool of liquidity is on DFX, an AMM that uses Chainlink for its real world forex price feeds to facilitate efficient stablecoin swaps close to the spot price. Such feeds are found here: https://data.chain.link/ethereum/mainnet/fiat

A majority of dfxCAD is backed by CADC, thus is indirectly affected by the Chainlink oracle. The DFX price is also derived from a SushiSwap TWAP for the remainder of the 5% collateral.

3. **Audits:**

> Provide links to audit reports and any relevant details about security practices.

CADC uses the same code as USDC which secures over $45B worth of assets. Its source can be viewed in the links above, and the security audits for USDC’s FiatTokenV2 smart contract all apply to the smart contract code of CADC.

Haechi has been commissioned to audit the dfxCAD code.

4. **Centralization vectors:**

> Is there any component of the protocol that has centralization vectors? E.g. if only 1 dev manages the project, that is a centralized vector. If price oracles need to be updated by a bot, that is a centralized vector. If liquidations are done by the protocol, that is also a centralization vector.

One centralization vector is that of the CADC issuer, PayTrie. It has a 2 of 3 multisig that is authorised to mint/burn tokens and blacklist addresses. See above section on Governance.

The dfxCAD token is managed by the DFX team and the collateralization ratio between CADC/DFX can only be altered by the DFX team. The ratio will be adjusted based on the price of the DFX token to maintain a peg to CADC.

5. **Market History:**

> Has the asset observed severe volatility? In the case of stablecoins, has it depegged? In the case of an unpegged asset, have there been extreme price change events in the past? Provide specific information about the Curve pool: how long has it been active, TVL, historical volume?

The CADC token has not experienced significant volatility or depegging against the Canadian dollar due to its 1:1 backing with fiat currency. CADC has been active since January 14, 2021 and currently holds approx. $4.2MM USD TVL on DFX’s AMM between Ethereum and Polygon. The Curve pool was seeded with $100K USD in liquidity pool assets.

The dfxCAD token is newly issued and currently has a 95% CADC backing. The chance of it depegging more than 5% is extremely low. There is 5% DFX used to further back the remainder of the dfxCAD token which can fluctuate in price.