At the start of the year, we laid out an ambitious roadmap for Sandclock in our Q1 2024 Milestones and Updates article. Looking back, seeing how far we’ve come in turning our vision into reality is incredible. Today, we’re excited to share our progress, celebrate our wins, and discuss what lies ahead as we continue to redefine DeFi.

In this article, we’ll revisit the priorities outlined earlier, share where we stand on each, and introduce exciting new initiatives for next year and beyond!

It’s a long one, so buckle up!

Project Dune

At the start of the year, we introduced ‘Project Dune’ to unify our web and mobile platforms into a seamless, user-friendly experience. Today, we’re excited to announce that the revamped platform is live! Users can now access their investments with an intuitive interface designed for both desktop and mobile.

Check out: Sandclock App

Yield Streaming

In the middle of this year, we finalized the development and testing of our yield streaming contract. While the contract has proven to be robust and fully functional, our in-depth discovery process revealed that there isn’t a compelling or unique use case for this feature within the current market landscape.

Rather than launching a feature for the sake of it, we’ve made the strategic decision to pause its release. This allows us to focus our resources on high-impact initiatives while continuing to explore opportunities where yield streaming could truly add value. We remain committed to revisiting this feature when the right use case emerges, ensuring it aligns with our mission to deliver meaningful innovation in DeFi.

Let us know if you have some ideas for it or know about interesting use cases! We would love to hear your thoughts!

You may reach out to us on Sandclock Discord

L2 + Starknet Integration + Opus collaboration

Our commitment to Layer 2 scalability continues to drive our growth strategy. We’re actively working on integrating with the Base network, which we believe offers the perfect balance of scalability and cost-efficiency for our vault strategies. This integration will provide our users with cheaper, faster transactions and broaden our accessibility.

Meanwhile, our plans for Starknet remain firmly in place. We are closely monitoring the progress of KakarotEVM, as its mainnet launch will pave the way for us to seamlessly bring our vault strategies to Starknet. Similarly, this milestone aligns with our collaboration with Opus. Once KakarotEVM infrastructure is fully operational on Starknet, we aim to integrate our ecosystems to unlock powerful synergies.

Milestones and achievements

At Sandclock, we aim to set new standards for trust, security, and reliability in Web3. This year, we’ve achieved key milestones that not only enhance our platform’s robustness but also position us as a pioneer in compliance and user protection.

SOC 2 Certification

One of the milestones we’re most proud of is earning our SOC 2 certification. It’s not just a badge of honor — it’s a testament to how seriously we take security, trust, and operational excellence.

Being among the few DeFi protocols to achieve this puts us in a stronger position to pursue something even bigger: a DeFi-native insurance license.

DeFi Native Insurance — Schwarzchild Insurance

After 3 years of extensive work with the regulators and many other governing bodies as well as stakeholders such as AIG — American Insurance Group, Deloitte, Walkers Global, HUB International, etc — we’re proud to bring insured vaults to Sandclock users.

Prioritizing Security: SEAL Safe Harbor Agreement

At Sandclock, security isn’t just a checkbox — it’s a cornerstone of everything we do. That’s why we’re proud to announce that we’ve joined the SEAL White Hat Safe Harbor Agreement from Skylock, an initiative alongside pioneers like Polymarket and OriginProtocol.

This agreement empowers ethical hackers (whitehats) to intervene swiftly during active exploits, rescuing user funds when time is of the essence. It’s a bold move that allows us to stay ahead of emerging threats while fostering a safer DeFi ecosystem.

For you, our users, this means even greater protection and transparency. It’s not just about responding to crises; it’s about being proactive and prepared. Joining SEAL is another layer of our commitment to safeguarding your assets and building trust in the Web3 space.

Read more: Sandclock joins the Security Alliance White Hat Safe Harbor Agreement | by Lucid | Sandclock | Dec, 2024 | Medium

What now for Sandclock?

We’re shifting gears to focus on delivering meaningful updates and features right now.

Here’s what’s coming your way:

Launching New Stable Strategies

After dedicating time to perfect the framework for our leveraging strategy, we’re ready to bring it to life. The hard part is done — the skeleton is built. Now it’s a plug-and-play process to integrate desired strategies.

As this article is launched, four new stable strategies are going live:

• scUSDS
• scDAI
• scSDAI
• scUSDT

For scUSDS strategy, Sky rewards are automatically converted and will be included into your yield.

These strategies are designed to offer robust, reliable options for stablecoin investors. Also, for convenience purposes, we have renamed all strategies into their respective underlying token.

Simplified Onboarding with Multiple Wallet Options

We’re lowering the barriers to entry by enabling support for multiple wallet types, including Coinbase Wallet and even Email login. This makes it significantly easier for retail users, especially those new to crypto, to get started.

No complicated setups — just seamless participation in the world of DeFi.

What’s Next for Sandclock?

We’re already working on the next big thing: Sandclock Strategy v3. We don’t have an exact launch date yet, but trust us when we say it’s going to raise the bar.

V3 is all about efficiency — streamlining performance in ways we haven’t seen before, not just for us but for our competitors as well.

We’re keeping the details close for now (we don’t want to spoil the surprise), but it’s something we’re really excited about. Stay with us — big things are coming!

The job’s not done! The Sandclock team is all-in on delivering real, competitive yield strategies. Crossing things off our core value proposition list feels amazing, but it’s just the beginning — we’re here to keep building and improving.

Big cheers to our incredible community — you’re the reason we do this.

Sandclock 2.0 — Insurance, SecurityAlliance and more was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

At Sandclock, safeguarding user funds has always been at the core of our mission. We’ve taken every step necessary to ensure the highest levels of security and safety for our users, including rigorous audits, formal contract verification, and proactive security initiatives. Today, we’re excited to announce another significant step forward: Sandclock has joined the Security Alliance and officially signed the Safe Harbor Agreement.

This partnership underscores our dedication to being at the forefront of Web3 security practices. By adopting the Safe Harbor Agreement, we are not only strengthening our protocol but also empowering whitehat hackers to act swiftly and effectively during critical moments. Below, we’ll dive deep into what this means for Sandclock, the crypto community, and the future of protocol security.

What is the Safe Harbor Agreement?

The Safe Harbor Agreement addresses a crucial challenge in the crypto space: enabling whitehats (ethical hackers) to take immediate action during active exploits when traditional responsible disclosure methods are too slow or impractical. This innovative framework creates a secure and legally protected pathway for whitehats to rescue funds during emergencies, ensuring that protocols like Sandclock are better equipped to face real-time threats.

Key Aspects of the Safe Harbor Agreement:

Encouraging Whitehats to Protect Protocols: By adopting the Safe Harbor Agreement, Sandclock incentivizes whitehats to step in during active exploits by limiting their legal exposure. This allows them to act without fear of liability while rescuing funds.

Intervention Only During Active Exploits: The agreement authorizes whitehats to act only during immediate or ongoing exploits that threaten the protocol. It is strictly for emergencies where traditional responsible disclosure methods would fail to save funds due to the urgency of the exploit.

Mandatory Return of Rescued Funds: Rescued assets must be returned to a pre-designated recovery address controlled by the protocol within 72 hours of recovery. This ensures a swift and secure return of user funds, avoiding delays or risks of further mishandling.

Incentivized Rescue Efforts: Whitehats are rewarded with a bounty system for their efforts. This is similar to traditional bug bounty programs, offering a percentage of the recovered assets (up to a predefined cap) as compensation for their intervention.

Our Steps to Adoption

Here’s how we’ve implemented the Safe Harbor Agreement to integrate it into our ecosystem effectively:

Engagement with the Skylock Team: We collaborated closely with Skylock to discuss and finalize the details of the Safe Harbor Agreement.

On-Chain Registration: The agreement has been registered on-chain in the Safe Harbor Registry. You can view the transaction details here.

Public Upload of Agreements: Additional agreements related to Safe Harbor have been signed and uploaded on IPFS. You can review the Agreement Fact Page here.

Terms of Service Update: We’ve updated our terms and conditions to reflect the adoption of the Safe Harbor Agreement.

Recognition in the Security Alliance Database: Sandclock is now listed in the Security Alliance database alongside other prominent Web3 platforms like Balance and Polymarket.

Public Announcement by Security Alliance: The Security Alliance has officially announced our adoption of the Safe Harbor Agreement.

Sandclock joins the Security Alliance White Hat Safe Harbor Agreement was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

As we navigate through the second quarter of the year, it’s incredible to reflect on how far we’ve come. The dedication of our team has been unwavering as we continue to strive towards delivering an even more exceptional product experience. Over the past months, we’ve achieved significant milestones in the DeFi industry and implemented upgrades to ensure our vaults are vigorous during catastrophic events to provide top-notch security and functionality.

Let us take a quick recap on the priorities that we proposed back in Q1 medium article:

1. Full mobile support — Recognizing the increasing demand for full mobile support, we understand that simply adapting our desktop version won’t suffice. Currently, navigating the Sandclock website and app can be confusing for our users, this made us reflect on our goal of simplifying crypto investment.
   
   To address this, Sandclock’s website and app page will be completely revamped. We’re merging them into one single product-centric platform. Due to its aesthetic, our design team decided to name this facelift project “Project Dune”. Expected to go live in Q2 2024.
2. Marketing efforts–After working with a Web3-native marketing agency and seeing lackluster results, we decided to part ways and regroup. Following an in-depth discussion with the team, we’ve crafted a new direction to market our vaults.
   
   One of our recent initiatives involved partnering with Superform to list our vaults on their website. This collaboration aims to expand our reach and provide users with easier and cheaper access to our vault through any L2. Currently our products are one of the top performing vaults on Superform.
3. Staking and Yield Streaming — Staking is LIVE! $QUARTZ holders can now put their $QUARTZ token to work by depositing it through the staking page.
   
   We’ve completed the development of the Yield Streaming contract and it’s currently undergoing testing with promising results. Knowing that releasing the yield streaming feature would be costly on Ethereum mainnet, we have something up our sleeves.
4. SOC audit — We completed an audit certifying our compliance with SOC 2 standards, making us one of the first few DeFi protocols to achieve this important milestone. This audit, based on criteria developed by the American Institute of CPAs (AICPA), assesses our information systems relative to security, availability, processing integrity, confidentiality, and privacy. Successfully passing a SOC 2 audit not only demonstrates our commitment to adhering to rigorous, industry-specific standards for handling data, but it also helped us identify and mitigate potential risks, enhancing our overall security posture, making Sandclock a stronger protocol for its users.
5. Insurance — In June 2021, the team embarked on an initiative to explore insurance coverage for user deposits at Sandclock, recognizing the unique challenges and risks associated with the operation. Over the following months, extensive discussions and deep learning sessions with insurers revealed a significant gap in the market’s capacity and willingness to offer traditional insurance solutions to Web3 operations. Faced with these challenges, by Spring 2022, it became apparent that creating a bespoke insurance solution was necessary.
   
   This led to the strategic decision to establish a captive insurance company dedicated to Sandclock. Significant steps included drafting a tailored insurance policy, hiring HUB International to conduct an intensive feasibility study, and engaging with legal and regulatory bodies, including the Bermuda Monetary Authority, to ensure compliance and secure licensing. A crucial partnership was formed with AIG, which provided infrastructure support and involved their VP of Captives in Bermuda joining the board of the new captive.
   
   As of Spring 2024, the project has nearly completed its incorporation phase and is poised to issue its first policy. This policy protects protocol funds against losses from unforeseen events such as security breaches, much like traditional bank deposit insurance systems in Canada and the USA. Looking ahead, the team plans to expand its insurance offerings and collaborate with other industry players to protect a broader spectrum of crypto assets on-chain, aiming to set a new standard for insured deposits in the industry.
6. L2 + Starknet — We’ve been actively exploring opportunities to bring Sandclock to L2 solutions like Starknet. Nimbora, in particular, caught our eye. Nimbora, built on Starknet, offers cost-effective interactions with Layer 1 protocols. However, given the early stage of the protocol, we’ve decided to pause our integration efforts to allow for a better understanding of its development trajectory before committing significant development resources.
   
   Rest assured, we are fully committed to advancing Sandclock’s presence on L2s, as evidenced by our Superform partnership. Following extensive research and evaluation, we have chosen to focus on integrating with the Base chain.
7. Discovery work to integrate Opus — Opus, our sibling protocol, completed its final round of audits in February, signaling that the launch of Opus protocol is happening soon. Given that the Opus team is currently finalizing audit fixes and tokenomics, it makes sense for us to align our discovery efforts closely with their launch timeline. We want to ensure smooth collaboration with the Opus team and avoid creating any friction that could delay their launch.
   
   If you haven’t already, we encourage you to follow Opus on Twitter to stay updated on their progress and upcoming launch.
8. 30,000,000 $QUARTZ Burn — We submitted a proposal to burn the Charity mining allocation token, which encountered some challenges in reaching the required quorum during the DAO voting process. Observing the overwhelming community support for burning the charity mining token, we realized that we were falling short of the quorum as the deadline approached. After careful consideration, the team decided to use our tokens to help reach the quorum threshold.
   
   We’re pleased to share that the tokens have been burned!

Concluding Q1:

It’s been a challenging yet rewarding quarter for us. We’ve dedicated significant effort to navigating regulatory processes, achieving insurance coverage, and securing SOC compliance — marking a pioneering achievement in the DeFi industry. While we’ve made substantial progress on our Q1 priorities, there are a few pending tasks undergoing enhancement before their public release.

But our work is far from over! We’re incredibly excited and motivated to continue delivering new features and advancements throughout 2024.

What’s next?

Having dedicated significant time to preparing and upgrading our architecture, we’re now ready to focus on scaling. While the spotlight may currently be on Liquid Restaking Tokens (LRT), we’re not discouraged by it. Our move to Layer 2 (L2) allows us to offer high and sustainable yields through our scUSDC and scETH vaults at a cheaper cost.

We believe that once the hype surrounding EigenLayer and the LRT points system subsides, interest will return to Liquid Staking Tokens. Despite initially considering leveraging LRT yield with leveraged points, we ultimately decided against it due to the lack of composability of LRT tokens and nebulous liquidity sources.

But that’s not the end of our story! We have a new strategy in the works, adding even more flavor to our roster.

Let’s not forget that yield streaming will be coming soon! This is more feasible when we adopt L2 solutions, we’re making yield streaming and Dollar-Cost Averaging (DCA) more affordable and efficient than ever before.

Protocol <> Protocol exposure

With Sandclock already up and running as a product, our next focus is to attract more TVL. To achieve this, we are expanding our efforts by reaching out to other protocols for partnerships. Through these collaborations, we aim to grow together and enhance the value we offer to our users.

2.7 Million TVL + 11M exposure to stETH

Our TVL has reached the $2.7 million milestone, reaching an all time high. Notably, we’ve achieved almost $12 million worth of stETH exposure. This tweaking of leverage allows depositors to enjoy higher yields on their investments while sleeping soundly knowing that their investments are being autonomously monitored for liquidations!

…and that’s all for now! Cheers to the growth of Sandclock and our beloved community members who stuck with us through thick and thin!

Q1 2024: Milestones and Updates! was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

Tl;dr —

1. Overview of project developments in 2023
2. Updates on Insurance, SOC, TaxWraps, scETH ETF, and Real-World Assets
3. Introduction of Opus
4. Proposal to burn 30,000,000 QUARTZ
5. Concerted marketing effort to spread awareness of Sandclock’s benefits
6. Update on 2024 roadmap featuring multi-chain support, yield streaming, DCA and more tailored strategies.

As a team, we focused on substantially upgrading our core architecture and launching our yield-bearing vaults in 2023. The rebuild of our core architecture into tokenized vaults was a major undertaking. Deciding to do a full overhaul rather than tweaking the existing code base slowed our pace to launch features/upgrades for users, but this was done intentionally. We believe our pivot to a more modular, easily upgradable foundation positions Sandclock well both for a fast-moving 2024 and years to come.

When we published our roadmap, we had one strategy (Liquity’s stability pool with a trailing loss) and planned on launching a diversified pool of newer 4626-compliant strategies. We also described our core mission:

1. Generate real yield on-chain through smarter strategies
2. Bring crypto to the masses by abstracting complexity away and creating a bespoke experience
3. Introduce DeFi-friendly insurance

In the following section, we give you an update on all the projects discussed in the roadmap (and more!)

Recap of Projects 2023:

1. Active Vaults — Our tokenized, 4626-compliant vaults: ScEth (Emerald), scUSDC (Opal) and ScLUSD (Amber) are all LIVE.
2. Coming Soon — Staking, Yield Streaming, DCA, testing ScETH on Arbitrum, bridging to Starknet, front-end and back-end upgrades all moved forward in parallel and we anticipate they will go live in Q1 of 2024.
3. Security (Internal) — We performed additional audits and formally verified our code.
4. Security (Global) — Our security team published security tools for the broader ecosystem to help protect their smart contracts
5. Insurance — After an extensive dialog with insurance industry professionals, lawyers, and other stakeholders, our insurance registration documents are now officially submitted to the regulators. Our goal is to insure the funds being used on the Sandclock platform. In our submissions, AIG is our insurance manager and we have an AIG representative as a board member for the insurance corporation.
6. SOC-2 — SOC-2 compliance has also been an on-going process, and an accurate SOC audit required our vaults to be live, our team to complete required training and certifications, and collecting evidence of compliance internally as well as for our third party vendors. The audit’s finish line is in sight, and we anticipate having a completed SOC-2 compliance report Q1 of 2024. To our knowledge, we will be the first Defi platform with a SOC-2 certification.
7. TaxWraps — In December of 2023, we described our work on TaxWraps in an article on Coindesk. If successful, TaxWraps will be a novel type of wrapper that will enable tax deferral of income generating assets like dividend-bearing stocks via tokenization. We are working with outside counsel to develop a viable strategy for this, but anticipate a bumpy road on this due to the complexity of tax codes and other relevant regulations.
8. scETH ETF — We are not shy about thinking big. As such, we have met with a couple of large ETF creators to explore developing ETFs that would track price movements of ETH and leverage Eth-Yield strategies via scETH. This is still very much in the discovery phase, but throughout 2023, we established relationships with regulated service providers, custodians, account administrators, and other stakeholders, and believe that ETFs could establish a gateway for the broader institutional interest in accessing Web3.
9. RWAs — We partnered up with a large real-estate developer who submitted a mortgage tokenization proposal to regulators and are waiting on updates.

Opus:

We hope you have been following Opus Twitter page for important updates. It is starting to be Starknet season and the hype for projects built on Starknet is on the rise. Opus will be a highly adaptive credit protocol that will seamlessly allow cross margin–borrowing against multiple assets at once. We believe the platform will be a game changer for user experience and risk management and will be significantly intertwined with the existing Sandclock ecosystem.

30,000,000 QUARTZ Burn:

Our beliefs are deeply rooted in the greater good. Sandclock started with a vision to support charitable organizations and NPOs. Over-time our vision expanded and we repositioned ourselves as a wealth management platform. Previously, we published this article on the topic of Charity Mining. From our experiments in October of 2022, when our TVL rose to $1.68M within a week or two, we noticed that none of our users allocated a portion of their yield to be streamed to a charity. There could have been many reasons but one that stands out, is the fact that the Web3 ecosystem is not established enough to support Charity Mining and its growth. The focus of many ecosystem users is quick gains, not sustained philanthropy. Therefore, 30 million tokens that were assigned to Charity Mining will be considered for burning. A proposal will be submitted to the DAO for voting.

Marketing Efforts

We have acquired the services of a Web3-native marketing agency and they will be leading most of our marketing efforts in 2024.

An Exciting 2024 Q1:

Irrespective of market conditions, we continue to keep our head down and build. We believe that our deliberate pace and security-focus over the past year have built a strong foundation for us to be able to respond with agility and quickness to opportunities that may arise over the coming year. We look forward to a year full of growth, improvement, and a growing community, and are excited to go on this journey with you.

With that in mind, our priorities for Q1 of 2024 are:

1. Full mobile support
2. Marketing
3. Staking and Yield Streaming
4. SOC audit
5. Expected response from regulators on our insurance filings and follow ups
6. L2 + Starknet
7. Discovery work to integrate Opus

We know DAOs struggle to allocate capital. It’s cumbersome and requires a lot of internal collaboration. Additionally, countless funds looking to get into web3 struggle with risk management and capital allocation. They need more powerful tools. To on-ramp, manage risk, view disclosures… a one-click solution to manage the whole process, from deposit to redemption. Such an offering requires a strong grasp of the web3 ecosystem and high technical prowess that only specialists can provide.

Custom strategies fix these pain points by making the process of multi-strategy allocation frictionless, with all the risk disclosures you deserve, all to empower users, organizations, and DAOs to fine-tune their risk appetite for optimized risk-adjusted returns.

Multichain support opens us up to more potential liquidity and reduces transaction costs for our users, but more importantly, it enables the creation of such a strategy builder.

Alongside the strategy builder, our Starknet integration will allow us to deliver lossless DCA, a requested feature that’s repeatedly appeared in our community 1-on-1s. Anyone will then be able to allocate yield to alternative digital assets. Will this supercharge your APY or destroy it? You’re in charge, but no matter your choice, only yield is at risk.

Cheers to a 2024 that is hopefully full of growth, gains, and good times for all!

January 2024: Important Announcements and Updates was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

Following the release of our roadmap, we have received overwhelming positive feedback from the community. While some may consider our ambitions to be lofty, we firmly believe in the importance of setting a North Star to create a shared vision and proactively develop strategies to overcome the incredible challenges ahead. In an environment where we are inundated with negative news on a daily basis, we remain steadfast in our commitment to building and developing innovative solutions that will benefit the entire Web3 ecosystem.

Leveraged stETH Strategy

We conducted a detailed feasibility study to assess the potential value of developing a leveraged staked ETH (stETH) strategy and have since broken down the strategy into multiple phases. The strategy relies on developing smart contracts that integrate Aave V2, Aave V3, Euler, Lido, and Compound III, with corresponding optimal allocations to ensure profitability at scale. With the ongoing updates to our platform architecture and backend heuristics, we can now begin developing more complex and valuable strategies for the ecosystem. We believe that launching advanced strategies that scale will be crucial in attracting TVL growth and providing easy and seamless access to yield opportunities for all types of Web3 users.

Smart Contracts

We have successfully developed smart contracts for two stETH strategies: one that accepts wrapped ETH as a deposit and another that accepts USDC. Additionally, the vaults supporting these strategies are tokenized, providing added flexibility and use cases. The phase 1 USDC-stETH contract development is complete, with a pull request submitted and awaiting merge. The phase 1 Weth-stETH contract is currently undergoing full test coverage to identify any potential attack vectors. Both contracts will soon undergo audit. However, the recent Euler exploit did affect our timeline for submitting the contracts for audits. Nevertheless, we have made necessary adjustments and are nearing the finish line. It is also worth noting that for USDC-stETh strategy, platform users will be getting exposure to ETH’s POS yield without having to hold ETH and the yields can potentially be higher than Lido or other liquid staking platforms depending on the borrow rates for ETH and the leverage risk-reward opportunities.

Backend

During the development of our leveraged stEth strategy, our backend engineers worked on improving the backend’s capabilities to allow quicker implementation of future loan providers and support the launch of the Levered stEth Strategy. Furthermore, newer modules are to be created to support the leveraged stETH strategies, and the backend is in the process of being updated to fully support donations and NFT donation receipts.

Strategy pages for the Website

One of the key feedback from the phase I launch of the platform was development of pages on our platform that explains each strategy in detail and how they work. Those pages are complete with detailed animations for Amethyst and Jade strategies and should go live soon. Given that we have a standardized layout, we have also begun working on pages for future strategies.

Many other changes pertaining to enabling multiple strategy support, timeline UI/UX changes to support modifications to the new timelock, etc. were also worked on by the front-end team.

Staking

Smart Contracts

Much of the work on the development of smart contracts for Staking has been done. Items pending are extensive review of edge cases to discover any potential attack vector, finalizing the UI/UX with community members and implementing their feedback and getting them audited. We have rescheduled our priority list to get the leveraged stEth strategy go live and then we will refocus on getting the Staking section of the platform to go live following that.

OPYN Crab Strategy

As indicated in our timeline, we will be launching an Opyn Crab strategy (OCS) as well and much of the contracts have been developed. Opyn Crab will be launched following the launch of stEth and staking. OCS will require an indepth edge case study and audit.

Account Abstraction and Starknet Migration

Though contracts for account abstraction (AA) have been deployed to mainnet, we have yet to assess its potential in supporting our use cases, namely with regards to gas costs for Sandclock, and its users. As you may be aware, the last phase of the leveraged stETH strategy includes the porting and augmentation of Sandclock’s novel vault architecture to StarkNet. This architecture will make use of StarkNet’s AA capabilities.

Mobile Experience

Developing a seamless mobile UI/UX for Sandclock is important. We have had many discussions and discovery sessions. Unfortunately, to use Sandclock via mobile devices comes with its own set of challenges and hence we have moved it around our priority list. Accessing the full potential of Defi projects via mobile devices and allowing complex interactions between multiple smart contracts and blockchain transactions, is difficult and clunky at the moment. Nevertheless, we are exploring different options to enable our vaults and strategies to be accessed via mobile phones.

Sandclock Vault APYs

With the market actively oscillating between the bull and bear sentiments, the APYs for existing strategies are continuing to rise. The 7-day average has hovered above 8% and if the market continues to exhibit weakening of the dollar against ETH, then our ETH accumulator contract should deliver attractive APYs. With the banking sector in turmoil and Balaji’s bet that there will be a run on the US currency, our Jade vault should be an ideal hedge against inflationary pressures that could devalue the US dollar.

Regulation

Especially in the United States, the regulatory landscape remains murky at best, hostile at worst. In discussions we’ve had with others working to build the crypto industry, repeated themes have emerged, including: frustration with the SEC’s regulation by enforcement approach, concern about the implementation of FedNow and a possible CBDC, and the reluctance of service providers in legacy industries to be involved with anything involving crypto due to the regulatory uncertainty. The collapse of several high-profile players in the space has led to increased regulatory hawkishness and skepticism towards crypto, encapsulated by Sen. Warren’s continued hostile rhetoric towards the space, rumors of an Operation Chokepoint 2.0 targeting crypto banking access, and the White House stating in the newly released 2023 Economic Report of the President that crypto assets “are largely speculative investment vehicles and are not an effective alternative to fiat currency. Also, they are too risky at present to function as payment instruments or to expand financial inclusion.” Conscious of this reality — and obviously disagreeing with those opinions — we continue to proactively work with our government affairs firm to educate lawmakers at the state and federal levels on the benefits of distributed ledger technology in order to foster the development of regulations that allow the space to innovate and thrive while protecting consumers from the sorts of bad actors who are inhibiting mainstream adoption of the technology.

Product Cycle Update (March 2023) was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

Yields are driven by economic activity, so it was no surprise to us when we witnessed the evaporation of on-chain yields with the bear awakening from its short-lived slumber. The collapse of multiple major players, amounting to losses approaching 12 figures, left a massive hole in — moreover, it destroyed trust in — the space. Jointly, these events led to a massive decrease in economic activity on-chain, as players begun to move their funds off-chain. But that is not all. There are other extraneous factors at play. Covid and subsequent lockdowns, lead to all manners of chaos and thus, inflation. In order to fight inflation, central banks often resort to contractionary monetary policies, whereby interest rates increase in order to reduce the velocity of money within an economy. These higher interest rates typically incentivize investors to flee to… government bonds!

Operating under the efficient markets hypothesis (oof), one may envisage yield as the market’s assessment of risk. When one thinks of risk, they may think of debt obligations issued by the U.S. Department of the Treasury — after all, they are considered to be risk-free because the “full faith and credit” of the U.S. government backs them. This year, the rate for short term Treasury Bills has been around ~4.5%, with Series I bonds averaging at ~8% for a full year!

Given that a highly liquid risk-free investment in the current period yields at minimum ~4.5%, is it truly shocking that smart money has temporarily left crypto after trust in the space has plummeted?

What can be done in order to adapt to changing market conditions and become a protocol that can succeed during both the bear and the bull?

THE NEW VISION

In the early days, we started out with three simple premises:

• Generate real yield on-chain through smarter strategies
• Bring crypto to the masses by abstracting it away and creating a bespoke experience
• Introduce DeFi-friendly insurance

The first phase of the project launch is now behind us. Releasing our first strategy, testing our models, and monitoring the security of our novel vault architecture gave us ample data for the next phases of the platform development. Thanks to our users, we have also received great feedback which has been incorporated in our product cycle.

Currently, Sandclock has a single strategy: Liquity’s stability pool with a trailing stop loss. As expected in a bear market, it only slightly overperformed B. Protocol’s instant liquidation backstop — after all, it is more often during the raging bull that we get to witness bounces from local minima, and these are precisely the movements that would benefit from a trailing stop loss, as per our backtesting. Be that as it may, the trailing stop loss afforded agents of the system the necessary time to short LUSD and marginally stabilize its peg, resulting in a better experience for Liquity’s high LTV borrowers.

Over the last few months we have been doing some soul searching — thinking of ways to become more resilient and adapt. Of course the aforementioned premises still hold, but we have surfaced additional insights: on top of bringing crypto to the masses, Sandclock should also bring real world yield opportunities to everyone, especially underbanked, and unbanked individuals in the crypto space, and expand to entrench itself as the most flexible, easy to use, one stop shop for all things wealth management.

This ranges from tokenized bonds, to higher risk products, and adapting the current interface to paint a more beautiful picture of what your portfolio looks like.

RWAs: SO WHAT?

These products are tokenized bonds. This is crypto — composable, transparent.

Imagine…

• if you could tap into leverage in order to increase your 3-Month Treasury Bill rate from 4.55% to, say, 13%;
• being able to hedge your portfolio with other Sandclock-issued uncorrelated assets;
• being able to gain access to highly liquid debt using your tokenized yield-bearing positions as collateral say, through a credit protocol.

These are all possibilities enabled by this play.

Sandclock is partnering up with legacy finance institutions in order to utilize their infrastructure to issue tokenized RWAs.

ITS NOT ALL ROSES

As with anything, these financial instruments do not come without significant drawbacks and it is important to understand them.

• Real World Assets are subject to regulation, and as such carry with them centralized points of failure.
• As with anything that involves legacy finance, the process is time intensive and we may pivot away if compliance costs exceed what Sandclock would stand to gain from the strategy.

Our crypto-native strategies are here to stay, but it would be foolish for a wealth management platform to not at least try to tap into traditional financial instruments in order to open up more possibilities and serve a wider swathe of people.

On-Chain

RWAs aside, we have also significantly overhauled our product development process in order to become faster and more efficient. As a result, we decided to refocus and trim off the “fat” — strategies with no moat — in exchange for strategies that can leverage complex backend heuristics.

Additionally, in an effort to ship more and cut down on development time, we broke up our development in multiple phases.

• The initial phase focuses on creating standard 4626-compliant vaults with our standard strategies—formal verification happens in tandem
• The second phase focuses on porting and augmenting our yield-aware vault architecture to StarkNet and having liquidity provision take place on L2

The strategies themselves favor synchronicity and are more aligned with the ethos of the space. They are currently being developed in a closed source repository which will be open-sourced soon.

Delegated, levered stETH strategy

Risk: Moderate+
Chain: Mainnet, Base
Currency: stETH, cbETH, ETH, USDC, DAI
Status: In progress (max priority)

Just as USD’s borrow is perpetually converging to its 3-month government Treasury bill rate, on-chain yields will inevitably converge to that, and ETH’s PoS yield. This strategy does just that, with a sprinkle of leverage and advanced heuristics. Additionally, this strategy will also be deployed to Coinbase’s Base once the relevant infrastructure pieces are operational on Base.

What makes it different from similar strategies from other protocols is that our backend is able to manage multiple collateralized debt positions simultaneously, and turn the strategy into an optimization problem. This approach reduces slippage, maximizes yield, and ultimately allows the strategy to scale to hundreds of millions of dollars, on as many chains as the necessary infrastructure is present.

Opyn Crab

Risk: Medium+
Chain: Mainnet
Currency: USDC
Status: In progress, backend 50%, halted

A simple strategy that deposits to Opyn’s Crab vault.

“Why wouldn’t I just deposit to Opyn myself? 😤”

On top of the obvious principal yield separation which will become more powerful once we’re on StarkNet, with account abstraction, Sandclock’s backend is IV-aware and attempts to time deposits and withdrawals in order to maximize your yield. A poorly timed deposit or withdrawal could really cut into your profit, whereas a properly timed one could boost your yield significantly.

StarkNet

We’ve talked about StarkNet in the past, and for good reason. StarkNet comes with account abstraction out of the box! Account abstraction will allow us to make Sandclock much more powerful and cheaper to use, as well as provide access to leverage for any strategy!

Unfortunately, StarkNet‘s programming language, Cairo, is experiencing rapid development with Cairo 1.0, so we’re waiting for development to stabilize which should be relatively soon (~April).

DCA

Currently, each strategy requires us to write special logic to DCA. It’s not possible to batch the operations with a single contract without incurring massive costs for our users. With account abstraction, this development time sink will reduced and gas costs will not only be feasible, but low.

UX

At present, EOAs allow for one action, one approval. Vile! With account abstraction, you will be able to batch all of your actions into a single transaction. Do many things, approve once!

Leverage(!)

This is our favorite one. Sandclock users will be able to access leverage for any strategy listed above, and gain new ways to hedge their portfolios.

Cheap

This one goes without saying. It’s a validity rollup. Cheap and safe.

Insurance

This one has been in the works for a long time. From crafting the world’s first DeFi native policy, running feasibility studies with existing on-chain data, to getting the correct applications to the right people… Traditional finance moves slowly, and just as you are waiting for this to be delivered, so are we. Rest assured, it’s moving forward.

SUMMARY

• Sandclock will offer multiple sustainable yield strategies on-chain with complex heuristics
• Sandclock is working to partner up with legacy finance institutions in order to utilize their infrastructure to issue tokenized bonds, on StarkNet

Together, these two types of products will make Sandclock a more attractive solution regardless of market conditions.

• Sandclock will integrate CoW Swap in order to entrench itself as a wealth management platform and overhaul its UI in pursuit of this goal, while providing the same superlative experience it always has

Sandclock remains committed to…

• creating a captive fund to bring insurance to DeFi
• bringing access to leverage to its strategies
• creating an immaculate experience for all its present and future users, with a focus on onboarding the masses
• integrating/developing on-chain strategies
• migrating to StarkNet for its native strategies, with an augmented, more powerful architecture powered by account abstraction
• chasing yield on other rollups like Base in order to reduce fees for everyone and increase profitability

Website | Twitter

Roadmap was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

SCIP-3 was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

The New Quorum Standard

As seen in all other DAOs, ideas are discussed and they are given time to ferment and evolve within discord channels and forum pages. Once those ideas have evolved sufficiently and there is a broader support, either via delegates or token holders with substantial exposure post the proposal and then others get to vote.

For future DAO proposals, the quorum thresholds—one million tokens voted for quorum to exist and holding at least 60,000 QUARTZ to be able to make a proposal for DAO vote—have been updated to reflect the larger circulating supply and ensure any resolutions put up for vote come from participants with significant stakes in the governance of the Sandclock protocol. Stakeholding thresholds for prompting action by an entity are standard in the business world. DAOs are no different. If any token holder could post a new proposal every week regardless of their holdings (with a single token, for example), it would hurt the project because it would be distracting and time consuming to deal with a deluge of proposals, many of which would be of questionable quality due to the low friction associated with posting one for vote.

Moreover, requiring minimum stakeholding thresholds to propose binding actions for DAO votes will not prevent good ideas from being voted on and implemented, regardless of who first proposed it. You may be familiar with the saying, “Nothing is more powerful than an idea whose time has come.” In the DAO context, once there is a broader consensus within the community about an idea’s viability, token holders with significant stakes in the DAO’s governance can and will be able to elevate the voice of the community and publish a proposal. The recent updates on the quorum requirements reflect the protocol’s maturity level and aim to limit proposals subject to a vote to those that have traction with a significant portion of the power to govern the DAO, which can be ignited during the discovery/debate period in discord.

Contrast SCRC-2 with SCRC-1. SCRC-1 was a proposal spearheaded by our community and it passed by a wide margin. That proposal aimed to create a staking contract wherein most of the fees generated by the platform would accrue to it, while simultaneously introducing some simple game theoretic mechanisms to align incentives between DAO and stakers. We believe SCRC-1 is merely the first of many future proposals that would find novel ways of distributing QUARTZ to community members via positive work done to help grow our ecosystem.

To support the proposal, the Sandclock team allocated resources during our current development cycle to do an in-depth discovery of SCRC-1 from a technical perspective to ensure we move forward in a deliberate, focused manner. Having finished discovery work ahead of schedule, we mobilized additional resources to start the development of the contracts needed to launch the staking contract. We will be releasing exciting updates and potentially an AMA on the staking contracts in the coming weeks. Although we believe the timing of releasing this contract may be a bit premature as the protocol does not currently generate substantial revenue (limiting the size of any staking rewards), we nevertheless wanted to support the DAO’s vote and build it. Similar to this, we initially did not prioritize the launch of QUARTZ on any CEX’s, but elected to do so earlier than planned based on the community’s strongly expressed will in favor of it. In hindsight, it is now obvious that perhaps it was not the right approach and we should have waited.

Our team is deeply devoted to the development of Sandclock, both as a protocol and as the basis of an entire ecosystem. Community members may have heard of other symbiotic projects being developed in parallel, and that is precisely because we are aiming for vertical integration of diverse moving parts to build a reliable, trustworthy, and successful protocol.

The relentless negativity by certain token holders, hurting their own community and the team’s focus, is an unfortunate situation that hopefully we can start to resolve and turn around in 2023 with a renewed commitment to productive dialogue between the community and the core Sandclock team.

It bears emphasizing that we are a small project continuing to build in the midst of a crypto-wide bear market facing severe global macroeconomic headwinds including inflation and likely recession. Despite that, we remain committed to making Sandclock the best project it can be, positioned to take full advantage of the inevitable cyclical nature of crypto and hopefully serving at the vanguard of whatever the next equivalent of 2021’s DeFi Summer turns out to be. As proof of our dedication, we’d like to share a screenshot of our internal workflow management. From that, you can see that even during the holiday season the team continued to meet and work on Sandclock. If you have any further doubts about our efforts to build, we invite you to monitor our progress at our github and project cycles pages, both of which are public.

Calling the past year in the crypto world “challenging” would be putting it lightly. First, the collapse of Luna/Terra forced us to pivot from our initial intended strategy. However, unlike a myriad of other protocols that were building on Luna and lost funds (in some cases all of them), Sandclock did not. As 2022 wore on, adverse economic conditions coupled with the spread of systemic contagion from the Luna collapse, exacerbated by alleged fraudulent activities by SBF and others at FTX led to substantial economic loss to projects, token holders, and users within Web3. We once again weathered that storm, thanks to conservative spending and risk-mitigation procedures allowing us to preserve organizational and user funds as best as possible.

Briefly turning to our roadmap, we are aggressively working on multiple fronts. We plan to release not only updates on the current projects, but also exciting plans that we have not made public yet. Most importantly, we believe our success and our reputation are inextricably tied to the success of Sandclock. Do not mistake our recent relative silence for inaction: we have been diligently building and developing innovations and solutions sprouting from Sandclock to help make it one of the most used DeFi protocols.

As 2023 progresses we hope to put any animosity behind us and work together as a united front with the community—with one voice and one vision—to see Sandclock excel as a model for Web3 projects in the months and years to come.

SCRC-2 and Other Updates was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

• The allocations outlined at genesis are not random

When the allocations were initially decided by the founding team (and agreed upon by you, the holders), we were aware of the negative connotations of low float. We are also wary of tokens with low float — given the history of the space. However, done correctly, low float has a non-predatory purpose that resonates with the ethos of web3.

“Inflation” (as used by crypto denizens, to describe existing tokens entering a given circulating supply) is unwanted by token holders, ourselves included, for obvious reasons. Thus, the goal was to have a low float, but allow holders to escape inflation through staking, and the vested rewards would be determined by KPIs (Key Performance Indicators).

These KPIs which track metrics like contributions to the codebase, TVL growth, net new user acquisition, etc. are valuable metrics that can be used to incentivize DAO members to collectively grow the project and be rewarded with the project’s native token. This mechanism is a powerful Web3 lever that can accelerate the usage and adoption of innovations built in the space. That is exactly why platforms such as Sourcecred, UMA, Coordinape, Collab.land and many others are continuing to grow, in part through offering tools that link token distribution to impactful work done by the members of the DAO.

The main role of communities is to evangelize and use the product and, as such, the KPIs should reflect these two metrics in order to align both parties — community, and DAO. As such, the token allocation is strategic in nature, because it allows for alignment of vision and distribution of the native token as rewards to impactful work done by DAO members to grow the platform.

• The DAO will partially lose its ability to incentivize growth in the future

Tokens are the web3 native way of incentivizing growth via distribution of ownership. It is understood in the venture world that market capture via aggressive spending is the most effective tactic to succeed. However, we are also of the opinion that this spending must be structured and timed correctly such that the CAC is always equal to or lower than the profit generated. While bear markets present a good opportunity to capture market share as others ramp down their marketing efforts, DeFi protocols are sensitive to liquidity conditions which, when low, result in lower TVL and collapsed yields, as a result of decreased economic activity. Thus, such tactics should only be employed when deemed appropriate.

https://twitter.com/AntonioMJuliano/status/1458844855006683143

• The DAO will partially lose its ability to raise funds in the future

In a similar vein as above, it is important for DAOs to retain the ability to diversify their treasuries when markets are bullish. This greatly increases their resilience. Debasing the token for no reason other than to minimize the founding team’s voting power is counterproductive.

• Dilutive events may trigger negative feedback loops

If you know there’s going to be a dilutive event, it will get priced in in the present — predicting that others will sell in the future, present holders have an incentive to sell. This would take place before the actual dilution so that when that event would come, the price would collapse further, potentially resulting in a death spiral. This rings even truer with the proposed discrete, single time allocation event.

Bottom Line

The above opinions and reasons have been publicly known for a while, but it is this last one that forces us to vote against this proposal, and we urge that others do the same.

We are not against warding off “inflation” — it was always the plan. We would consider a similar proposal if it were integrated with SCRC-1 (and we will likely be the ones to make it), the staking contract, the distribution occurs over a long enough period of time, and made use of KPI options that actually aligned incentives, in order to distribute vested QUARTZ tokens. Being integrated with staking would help with incentive alignment, be continuous, and address some issues.

Lastly, we urge that proposals be more professional and include actionable items and technical specifications.

Twitter

The Next Generation of Wealth Creation.

Our Stance on #2 was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.

Delivery

• Interface for Multiple Strategies — The bulk of the work is done, some PRs are being reviewed and the time-lock is changing. Also, adapting the Yield Claim modal to support different currencies. Next step is to deploy to staging and test it.
• Liquity Testing — The internal tool is practically complete. Soon, it will be able to adequately backtest the strategy and refine the parameters of the stop loss in order to maximize yield.
• Liquity ETH exposure — All issues were addressed and are pending review of the auditors.
• Applications for a captive insurance fund were submitted.
• Consulted with OneTrust to prepare SOC audits anticipated to begin in Q1 2023.
• Security enforcements—The focus was on doing the necessary work for our backend. This project is ongoing.
• Wallet configuration — Project was not picked up since the focus was on the multiple strategies.
• Opyn Crab Strategy — Proof of concept was implemented for deposits and withdrawals; missing some feedback for the documentation. It is ready for a delivery cycle.
• Tokenized Vault Pilot—Proof of concept was completed but is missing clarity on how it would work with all Sandclock features. Will be used as a stepping stone to developing a StarkNet native architecture this year.

Other small updates to the frontend were delivered ad hoc and are not documented here.

Discovery

• Product Management — A roadmap session took place and Cycle Reports were produced. Roadmap requires further iteration to increase clarity on the milestones necessary to execute vision.
• Data & Information Transparency — Requirements were done. Begun working with Onda to get this on the website.
• Goldfinch Strategy — Discovery done. Could bring new sources of RWA yield on-chain by leveraging their infrastructure, but unsure if current product users would use it given the timelock requirements of real world borrowing facilities. Further user research is needed here.
• Unique Monetary Value Display — A solution is documented. Should be able to take it to delivery now.

Upcoming Cycle

With regards to the new cycle, you can check it out here.

That’s all for now.

Twitter | Discord | Telegram

The Next Generation of Wealth Creation.

End of Cycle Update #2 was originally published in Sandclock on Medium, where people are continuing the conversation by highlighting and responding to this story.