GROWTH DeFi (August 2020) claims to be a Defi ecosystem on the Ethereum (ETH) Blockchain built to maximize yields from the top DeFi protocols, introducing liquidity provider exposure without suffering from impermanent loss. ^[1]

GROWTH's purpose is to create an ecosystem where both GRO holders and gToken holders can benefit from the positive effects of compounded interest, high liquidity, and a Share of arbitragers' profit without suffering from impermanent loss.^[2][3]

Growth launched PERPS Yield Farm and Futures Exchange on 21 September on Binance Smart Chain.^[13][14]

The Team Behind Growth Defi

Rodrigo Ferreira is the Head Developer for the backend code of Growth DeFi. He has a Ph.D. in Computer Science from Yale and has a deep background in formal Semantics, program verification, and compilers. Rodrigo is deeply interested in Cryptocurrency/Blockchain and has previously developed a mobile wallet and a Cryptocurrency exchange.

As he says on his LinkedIn, “As a Software engineer I can assemble and deploy complex systems in a variety of languages and platforms. As an entrepreneur, I like to build applications for interesting business cases that can scale with automation.”

Irving Cabello Almazán is the Head Developer for the frontend code of Growth DeFi. As a full-stack JavaScript developer with a strong passion for Ethereum (ETH), DeFi and the Blockchain ecosystem Irving has gained experience by building platforms on React and Node for over 4 years and has also developed multiple Decentralized applications (DApp) for Ethereum using Solidity, Web3, and Truffle. ^[4]

Overview

Growth DeFi is a new Decentralized finance platform looking to improve on the DeFi experience. Built on top of the already successful Aave ($AAVE), Mooniswap, and CURVE protocols the platform seeks to allow its users to maximize the yields they earn as liquidity providers.
This hands-off approach to investing in the Cryptocurrency space is becoming increasingly popular, so let’s look at Growth Defi and see if they have what it takes to become a dominant player in this increasingly crowded DeFi space.

Growth Defi provides an easy way to maximize the yield users can generate with their tokens by using PMTs & gTokens, GRO is the token of the protocol and when staked it has governance rights over the stkGRO DAO and shares the profits generated from the fees charged in PMTs & gTokens.

To generate yield Growth DeFi uses many DeFi protocols including Compound Finance, AAVE, Curve, and SushiSwap. ^[5][6]

The platform is clear in its intention to become a complete suite of DeFi tools that will offer its users optimized strategies for all existing DeFi protocols.

It is built around the GRO tokens, which are deflationary tokens that grant users voting and staking rights while also going after capital appreciation. Tied to the GRO tokens are the gTokens that provide a direct appreciation source for GRO tokens through fee burning.

Growth DeFi's platforms consist of MOR, the crypto lending platform, and Wheat, a sustainable yield farming protocol.

MOR:

MOR is an overcollateralized stablecoin used for borrowing on the MOR protocol. Users can use their yielding assets as collateral, such as their stkTokens and LPs while taking advantage of low, fixed borrow rates.^[15]

WHEAT:

WHEAT is Growth DeFi's incentives token with a buyback collector mechanism (i.e. Exponential Buyback Collectors) to increase token price and deflation.^[12]

Growth Defi token (GRO)

GRO is the core token of the Growth Defi ecosystem, it can be staked (stkGRO) to share the profits generated by the ecosystem and have voting power over the stkGRO DAO.

It has a total supply of 1,000,000 GRO tokens and the main use case of the tokens is for staking to provide voting rights in any proposals, which allows the holders of the token to determine the future course of the protocol.
GRO is not only deflationary but is used for yield farming on xPERPS.

characteristics/uses of the GRO token:

Staking: Staking isn’t yet implemented, but it is expected in the first quarter of 2021. Users who wish to participate in the governance of the protocol will be required to stake their GRO and receive stkGRO in return, which keeps their tokens liquid even when being staked. There are no lock-up mechanisms planned for the staking system.

Liquidity: The liquidity for gTokens is provided by the different GRO pairings, and this allows users to buy and sell their tokens at any time with low slippage.

Deflationary: Half of the fees required when minting gTokens are burned, and there is also a 10% fee for staking GRO, half of which is burnt. This decrease in tokens not only decreases the available supply of tokens but also ensures they are deflationary.

Growth DeFi is setting itself up as a sustainable farming protocol, with the Tokenomics design meant to reward those who are intending to hold tokens for a long period. The team is attempting to create a complete ecosystem where users can enjoy investment stability across a broad range of DeFi protocols. Essentially they believe there are no limits to what they can build as an add-on to the protocol.

GRO Token Distribution

The original total supply of GRO was 1,000,000 GRO but close to 4,000 GRO has been burnt since launch:

GRO Treasury: 500,000 GRO

PMINE Swaps: 250,000 GRO (Indefinite fixed swap rate of 12.5 GRO/PMINE)

Team & Development: 200,000 GRO vested and released throughout 24 months starting in September 2020

Initial Liquidity: 50,000 GRO (for the initial liquidity) ^[7][16]

stkGRO

stkGRO is the tokenized representation of having GRO staked, holding stkGRO compared to GRO gives access to profit sharing and stkGRO can be used to delegate to candidates who then form the signers of the stkGRO DAO. Profits shared to stkGRO holders come from gToken PMTs fees and the profits made by the GRO treasury amongst other sources. Due to the governance implications of stkGRO, there is a 10% fee whenever GRO is converted into stkGRO or the other way around, the purpose of the fee is to only have long-term thinking holders taking governance decisions, this fee is split 50/50 between burning GRO and distributing that GRO to existing stkGRO holders. Profits accrued by stkGRO are shown by an increase in the price of stkGRO vs GRO, stkGRO can only go up vs GRO and this ratio is proportional to how much GRO the staking contract holds relative to the stkGRO in circulation, profits are shared by buy backing GRO and sending it to the stkGRO contract thus increasing the stkGRO/GRO reserve ratio.^[8]

What is the stkGRO DAO?

The stkGRO DAO is the governance mechanism, stkGRO holders delegate their vote to their favorite candidate (anyone can be a candidate for the DAO), and the top 7 candidates with the most delegated stkGRO become the signers of the DAO multi-signature account ( Gnosis Safe is used for the multisig), stkGRO holders can change their vote to any other candidate whenever they want.

The multi-sig is the admin of all contracts within the Growth DeFi ecosystem and it’s responsible for managing both GRO’s and rAAVE’s treasuries.

Introducing tokens

One of the core components of the Growth DeFi ecosystem is the gTokens. These unique tokens not only offer the compound interest potential that comes from providing liquidity, but they also take arbitrage profits and a portion of minting and burning fees. They also benefit from the higher liquidity provider profits generated at Mooniswap and offer additional GRO incentives by providing liquidity. Basically, the gTokens are a way for liquidity providers to access higher yields than usual and accumulate more of the underlying tokens.^[17]

An example of a token would be gcDAI which is minted by depositing either DAI or cDAI, the contract then performs the strategy which in this case it’s about maximizing its yield through leverage by farming the highest amount of COMP possible.

There can be a gToken created for anything as long as there is a viable strategy to automatize and generate profits with, it makes the process of performing the strategy easier and cheaper in gas than if the user were to perform it by themselves.^[9]

Locked Liquidity Pools

One of the key features of the gTokens is Locked Liquidity Pools which was first demonstrated by the Proof of Liquidity experiment carried out by Unipower. gTokens have adopted locked liquidity pools as a means to distribute the profits that come from locked liquidity pools to the GRO and gToken holders.

Locked LPs accumulation

Locked liquidity pools get a boost to their balances by accumulating a 0.5% portion of all minting and burning fees. Each gToken provides the fees generated to the corresponding liquidity pool, so any gDAI fees go to the GRO/DAI pair, gETH fees go to the GRO/ETH pair, etc.

Burning Profits

Those holding gTokens receive periodic rewards as the fees generated by the locked liquidity pools are occasionally burned, taking them out of circulation and reducing the overall supply. This all comes from trading volume and market volatility and it is an additional profit/growth source for gToken & GRO holders. ^[10]

gToken Arbitraging

Arbitraging is the unique strength of the gToken. Until the creation of Growth DeFi, there was no other way to profit from the activity of arbitrageurs other than providing liquidity to pools. Of course, this also increased the risk of suffering impermanent losses, which was a less-than-ideal situation. One of the primary reasons for creating gTokens is to solve this problem of impermanent losses caused by arbitrage behavior in liquidity pools.

This also highlights the importance of high liquidity to the GRO/gToken pairs. The greater the liquidity of these pairs, the greater the fees that are generated by the activity of arbitrageurs. To achieve the maximum level of liquidity possible Growth DeFi combines its permanent liquidity pools with incentives in the form of GRO rewards for providing liquidity for the pairs, this mechanism is also known as ”Liquidity Farming”.^[11][18]