What is Gro Protocol?
Gro is a decentralized finance (DeFi) protocol that makes it easy to earn stable coin yields. It all started when the founding team from traditional finance background wanted to find a savings account-like product on DeFi. But that was DeFi summer when bountiful yields came with a steep learning curve, and getting a lower-risk product was onerous. That’s why Gro was born.
Launched in August 2021, Gro started its journey through aggregating yields across multiple protocols & stablecoins and presenting two choices: PWRD stable coin, which offers deposit protection, and Vault, which gets a higher yield by protecting PWRD users. Both products aim to make getting into DeFi yield farming as easy as possible - their users would not need to learn the difference between stablecoins and how various yield farms work. Instead, they’d only have to deposit USDC, USDT, or DAI and pick their risk appetite; Gro will then take care of the rest. Mobile users can also start using our products directly with the Argent app on Ethereum main net and zkSync.
In December 2021, Gro expanded to Avalanche with its new product Labs and introduced another way to simplify DeFi. Labs automate leveraged yield farming to make advanced strategies more accessible so that users only need to interact with stablecoins – leaving the manual operations (e.g., borrowing & selling volatile assets, monitoring your position to avoid liquidation) entirely to Labs.
How does Gro work?
Gro protocol works by balancing risk and yield to deliver healthy yields given our users' risk. For Vault and PWRD, Gro diversifies risks through allocating funds in various stablecoin trading pools to earn fees and governance incentives; the twist is that the funds are tranched so that the lower-risk product PWRD is being shielded from stablecoin de-pegging (i.e., when stablecoins lose its 1:1 peg with USD) and protocol exploitation. PWRD gives away some of its yield to Vault, which takes on those risks in return for such protection. If any such scenario happens, all loss of funds would first be absorbed by Vault before hitting PWRD. This means PWRD users can sleep well knowing that their funds are being shielded from high-impact risks by Vault. This is not to say PWRD users would never lose funds, but that would only happen if Vault is completely wiped out. Gro makes sure there is always more Vault than PWRD so that only if the protocol overall loses more than half of its funds would PWRD start to be at risk of losing its deposits.
Beyond the protocol, Gro is also a decentralized autonomous organization (DAO) that aims to decentralize decision-making and operations to those who hold its governance token $GRO. Gro’s first DAO votes were conducted before the token launch by creating a proxy token that early protocol users used to determine if they agreed with the tokenomics and token launch (more on BanklessDAO’s Decentralized Law newsletter #3 under “DAO Legal Tools”). After the token launch in October 2021, $GRO holders voted to fund additional security audits, update tokenomics, initiate Olympus Pro bond, and rebalance the risk & yield of our first offerings, PWRD & Vault. The DAO has also started decentralizing operations starting from Marketing (G-Force) and moving to Treasury Management.
How do we make sure $GRO holders’ incentives are aligned in the long term? That is because Gro built in a 12-month vesting mechanism for all its rewards through airdrop and liquidity mining - if users want to leave early, they will give up the portion that has not been vested yet. The forfeited amount is not burnt but rather put into what we call a “Vesting Bonus Pool,” Those who stay investing can claim a bonus every four weeks. This provides flexibility for those who need immediate liquidity to participate in our rewards system while offering ~100% APY for those who hold a longer-term conviction and are willing to keep vesting. For more information about our tokenomics, check out our documentation!
Having received valuable input from DAO members after the token launch, Gro is now revamping itself to meet the needs of our users. It has recently unveiled the upgraded tokenomics and is about to launch new yield strategies for PWRD, Vault, and Labs!
That’s not all - most recently, we have partnered with EPNS to enable push notifications for our users so everyone will know when to claim their Vesting Bonus and airdrops! You can read up more about it here. While you’re at it, check out our integration with Chainlink to safeguard our price oracle, which offers extra security besides our audit efforts and $1,000,000 Immunefi bounty that you can read more about here.
We’re developing a more detailed roadmap to share with our community, with the overall direction being making Gro easy to use, safe & secure while delivering high yields. Decentralization will underlie all these imperatives. Stay tuned and follow us on Twitter or Discord to get the latest news!