I don’t know if something like this would even be feasible but I am just curious to see what others think about this idea.
Basically I am very optimistic about the adoption of Anchor and I think once users realize that they can earn safely 20% on their savings, the demand is going to be quite high. On the other side we will need users to deposit yield-bearing assets as a collateral to generate the yield for UST deposits. I know it was already mentioned that in the near future we may see other yield-bearing tokens like Polkadot being enabled but I was wondering if the listing could be expanded to some DeFI tokens.
Accepting DeFi tokens as a collateral would definitely be riskier from a yield perspective because their yield swings a lot over time but I think that on the flipside there are couple of points that may justify this risk in some cases:
- Yields for DeFi tokens are generally higher than staking rewards of other tokens like Polkadot, this would compensate for the higher risk that Anchor takes (of course the community should whitelist DeFi tokens that are deemed suitable)
- Risks could be mitigated by enabling only Deposit of collateral for a fixed amount of time. A token X can have a yield of 150% APY but this could easily go down to 5% or less, so by enabling the use of such a token as a collateral for an indefinite amount of time it would be risky. On the other hand, if we give an expiration date to the deposit of the collateral the risk is much lower. And the user that provided that collateral would have to deposit it again after the first term expires.
As a condition we could set that the token must have at least a certain % APY at the time of the deposit to be eligible or we could use an oracle to automatically list eligible DeFi tokens that meet our criteria.
With something like this Anchor would truly become a buffer to mitigate the risks and complexity of DeFi and make it accessible to a vast number of people. I am not sure if what I wrote is feasible from a technical point of view, I just thought I would share my idea and trigger some discussion.