Ambit
Double Duty Loans Protocol
About
The problem it solves Sustainably funding public goods is one of the hardest problems in Web3. Most projects rely on one-off grants, treasury spends, or token sales, which are finite and deplete a DAO's capital. This creates a difficult, binary choice for treasuries: 1. **Hoard & Grow:** They can deposit assets into yield-bearing protocols to grow their treasury, but this provides no direct, tangible benefit to the public good. 2. **Spend & Fund:** They can donate their capital, but this is a one-way expense that drains their resources. Ambit solves this "either/or" problem by creating a **perpetual funding engine for public goods**. It's a "buy-one-get-one" strategy built on Octant's **YieldDonatingStrategy** framework that allows a DAO to **deploy** its capital instead of just spending it. The strategy's "double duty" mission is to: 1. **First and foremost, fund public goods** by capturing the lending interest from a dedicated Morpho market and automatically donating it to the Octant **dragonRouter**. 2. **Simultaneously, provide a community service** by using a separate, primary yield (Spark's DSR) to auto-repay loans for its own members. All of this is done while keeping the DAO's principal deposit perfectly 1:1 pegged and safe. ### **What can people use it for?** Ambit transforms a static DAO treasury into an active, self-sustaining engine for ecosystem growth. **For Public Goods & the Octant Ecosystem:** * **Continuous, Automated Funding:** This is the primary benefit. Instead of relying on manual grants, Ambit creates a **perpetual, automated, and self-sustaining stream of funding** for public goods. The DAO's capital works 24/7 to generate donation revenue via the Morpho market's lending interest. **For DAOs & Treasuries:** * **Capital-Efficient Philanthropy:** It turns public goods funding from a pure expense into a capital-efficient operation. The DAO can now fund public goods *while* offering a powerful perk to its members (auto-repaying loans), all funded from the same underlying asset. * **Safer Treasury Management:** The strategy is built for safety. 1. **1:1 Peg:** Our tests (**test_profitableReport**) prove the DAO's principal is 100% safe and 1:1 pegged. The yield is skimmed off, but the principal is never at risk. 2. **Robust Withdrawals:** The strategy is production-ready, safely handling complex DeFi edge cases like "withdrawal dust" by intentionally leaving ~1200 wei of collateral, ensuring DAO funds are never stuck. **For Community Members:** * **Access to Auto-Repaying Loans:** A whitelisted community member can borrow from the dedicated Morpho pool. * **Makes Borrowing Radically Easier:** The strategy automatically pays down the principal of their loan over time using the DSR yield. This is a "subsidized" loan where the principal magically shrinks on its own. ## 🏆 Prize Track Eligibility ### Spark Protocol - Best Integration Ambit showcases deep Spark Protocol integration: - ✅ sDAI as core collateral asset - ✅ DSR yield as primary yield source - ✅ Novel use case: Auto-repaying community loans funded by DSR - ✅ Production-ready with mainnet testing - ✅ Demonstrates sophisticated understanding of Spark mechanics ### Morpho Blue - Best Integration Ambit demonstrates advanced Morpho Blue usage: - ✅ Custom isolated market creation (sDAI/DAI) - ✅ Multi-position management (collateral + borrow + supply) - ✅ OnBehalf functionality for community debt repayment - ✅ Production-grade safety (dust handling, LTV management) - ✅ Creates lending pool for community borrowers ### Main Octant Prize Ambit perfectly embodies Octant v2's mission: - ✅ YieldDonatingStrategy framework integration - ✅ 100% interest donation to public goods - ✅ Innovative dual-yield mechanism - ✅ Community service + public goods funding ## The Future of Public Goods Funding Ambit represents a paradigm shift: **capital-efficient altruism at scale**. Instead of asking "How much can we afford to donate?" DAOs can now ask "How much impact can we create with our capital while keeping it safe?" **This is what sustainable public goods funding looks like.** - For every $1M deployed: **$40K annual public goods impact** (perpetually) - Treasury principal: **100% preserved** (1:1 peg) - Community benefit: **Included** (auto-repaying loans) - Administrative overhead: **Zero** (fully automated) **Ambit doesn't just participate in the public goods ecosystem—it fundamentally reimagines what public goods funding can be.**
How it's made
Challenges we ran into We faced a significant hurdle while building Ambit: a complex, protocol-level technical bug . #### The "DeFi Dust" Withdrawal Trap Our biggest technical challenge was a real-world DeFi edge case: the "DeFi Dust" withdrawal trap. * **The Hurdle:** Our strategy holds a leveraged position on Morpho Blue, supplying sDAI as collateral and borrowing DAI against it. When a user tries to withdraw 100% of their funds, the strategy must perfectly repay 100% of its DAI debt to unlock 100% of its sDAI collateral. * Our simple implementation kept failing. Due to on-chain math rounding or micro-second interest accrual, even after repaying what we *thought* was 100% of the debt, the Morpho protocol still registered 1 wei of "dust" debt. This caused the final withdrawal of all collateral to **revert**, which would have trapped all user funds in the strategy. * **How We Solved It:** We re-architected our _withdrawProportionally function to be "dust-aware". The function now repays the debt and then **re-checks the Morpho market** for any remaining dust. If it's a full unwind and dust is found, it **intentionally leaves a tiny, calculated amount of collateral dust** (~1000-1200 wei) to safely cover this micro-debt. This small sacrifice allows the withdrawal to succeed, which is proven in our tests using assertApproxEqAbs.