Hey @bitn8 I see a couple of others and I have raised the issue of the reserve. What do you think of Anchor selling accrued staking rewards so that borrowers withdraw the same Luna value of LunaX as when they deposited. Anchor sells off the accrued Luna to continuously top off the reserve?
Example:
Collateral Deposit 10 Luna’s worth of LunaX
LunaX accrues to 11 Luna. Anchor sells that 1 Luna for the Reserve.
Borrowers pays back loan and gets 10 Luna back.
Repeat every 8 hours or so.
Human nature. This means Anchor can still charge lower APRs on loans. In reality, borrowers are paying the same, but since their collateral is paying part of the APR, they will see a smaller number. This will encourage borrowing compared to a big number.
Not everyone will do the math to compare collateral Eth on Aave vs bETH on Anchor, they will just go to the lower APR.
Good idea and something that has been brought up. However, it seems like this complicates the model a bit more than it needs to and would cost the protocol swapping fees as well.
The idea is to wrap the staking tax into the distribution APR display to show you are getting part of those funds back as it is making your loan cost cheaper. It is also the additional cost of your loans on Aave, comp etc. where you don’t get distribution APR to help lower your cost of the loan because the protocol is not taking staking returns. It’s all about the presentation and messaging.
If it is convincingly presented to a naive user that net APR on Anchor is actually less than on competing protocols (like Aave where staking is not used), I fully support Anchor V2. I agree that it is all about messaging novice borrowers.
Mentioned this in the “cross chain anchor” thread, but maybe this is more relevant here, so reposting.
With sAVAX and cross chain anchor on avalanche launching soon, is it time to vote for more audits to be done on the borrow v2 model as well as cross-chain anchor?
@bitn8 would new audits be necessary or would any completed audits be shared with the public soon?
@bitn8 After we get Anchor v2 approved and online, shouldn’t we also consider increasing the target usage ratio? At the moment it tracks 60% if I’m not mistaken, increasing it to 75-80% should result in more incentives to attract even more borrowing.
The risk would be most wanting to withdrawal their deposits at the same time and Anchor only able to fulfill 20% of that, but that risk seems less and less likely each day.
Great point - totally agree that we need a single net APR number in the UI, the psychological aspect can actually have make-or-break impact in this case.
@bitn8 I’d be super happy to provide feedback - whenever you have any designs/wireframes for how the new UI will look, it’d be awesome if you can share them.
I’d like to bring this proposal back into the spotlight, with the addition of sAVAX that no longer complies by the rules of POS collateral with the yield being paid to the protocol, on top of the borrow APR, other collateral types are now at a severe disadvantage making them even less attractive. We should not take to long making all collaterals alike…
Dynamic Earn Rate is now going to be approved, the longer we take to fix the borrow side of the equation, the lower the rate will go.
@bitn8 Has any progress been made on this proposal, or has all focus shifted to others?
One click borrowing is not on the immediate roadmap due to the long execution times (20mins) over wormhole for Polygon and ETH. Meaning, we really need one click to borrow to make this work. The idea would be to deposit a non LSD collateral, say ETH, and instantly get wrapped UST, while on the backend it stakes it for stETH and sends it over wormhole to Terra side.
We also need to clean up the UX/UI but that is still being backlogged due to all the chains we have to build front ends for now.