It would be nice to have more currencies for lender.
I agree, It would be great to be able to stake Terra Euro, Yen, and even SDT. However, problem is that there isn’t any meaningful liquidity in any of these coins. Sadly, all the whole crypto spaces is still defined by USD which is a risk itself when staking. If you staked the dollar here last year when DX futures where 98 + you lost nearly 8% in value that you would have to shave off the yield on any stable-coin lending protocol which on compound and Avae would put you at a loss especially if it was less than 50k because of er20 fees.
Maybe getting some of these other terra stablecoins on here will help generate liquidity around them. SDT is my pick but it seems no one else wants stablecoin diversification. It seem the mantra is no fiat at all or if fiat USD but I hoping that will start to change.
3 Likes
yes SDT is also my pick for global.
Yes agreed. Since the USD is the world currency it makes sense to start off with UST, but from an investing standpoint it is much wiser to invest in an artificial basket currency like SDR (SDT) to minimize inflationary risks. I think this is simply an undervalued and largely unknown strategy, perhaps Anchor can start a promotion around SDR?
Once people understand the significance, having an SDR savings protocol can really catch on.
I suppose liquidity is the real issue here, as already mentioned. How can we find solutions?
2 Likes
I agree, SDR or EUT would be great, this would allow many of my friends to start participating as well, who are afraid of relying on USD for savings.
1 Like
I have to say I disagree with using SDR.
People want to hold and spend the currencies they use in their everyday life. SDR is just not going to make any sense when other supporting applications like Alice are released.
I think we need data on who Terra users actually are or potentially are (Won users? Yen users? Euro users?) and then support the currencies starting with the largest demand.
2 Likes
I think allowing mutliple stablecoins in Achor will actually be really great, because then, we can build synthetic FX swap and forward protocols on top of it. FX swaps and FX forwards are useful tools for people who want to hedge their FX risk. Imagine that I (in the UK) run a small business that has European customers but UK suppliers and staff. My revenue is in EUR but my cost is in GBP. If i wanted to hedge my EUR exposure forward there is currently no way to do that. Banks face large corporations, insurance companies, and pension funds routinely, but FX forwards and swaps being derivatives, there is no way for smaller businesses and retail users to access this market. If Anchor allows multiple stablecoins that one could post and borrow against, then I think this is actually a powerful use case that differentiates the Terra ecosystem. Terra has a suite of stablecoins built in, but none are being used outside of KRT and UST. Isn’t this kind of stuff what the whole blockchain revolution DeFi is all about?
4 Likes
Nice to see such a strong usecase. I imagine you could post this also on the Terra forum. I’m sure the team will consider this when an actual business is vying for it. Perhaps they are even working on it as we speak!
Good point, certainly is true that SDT would be in low demand.
Right now most traded stables are UST, KRT and MNT. (As seen on Terra Dashboard)
I imagine JPT and EUT to be next, but only when bussiness start using them since DeFi will most likely keep on relying on UST.
100% agree.
Looks to me from the way the Anchor UI is designed that they’re planning to add other stablecoins in due course. Each stable coin will need their own depositors, borrowers, yield reserve and ANC liquidity pool so there’s quite a bit of overhead in adding these but no major technical hurdles.
Really hoping Saturn will create usage for EUT and GBT, and in turn drive liquidity. Everything being in UST is huge pain from taxes perspective. If we could deposit fiat to anchor on 1:1 ratio, it would simply things a lot.
Makes sense. I think it’s better to wait until UST deposit pools build up decent liquidity & start to add other deposit pairs - think this is more of a when question rather than whether.
2 Likes
Yes the main blocker right now in adding other stablecoin denominations is the fragmentation of liquidity. Though once a good strategy is found for gathering liquidity for non-UST stablecoin markets, implementation will be quite trivial. Both Anchor’s WebApp and smart contracts have been designed to easily support this.
Another method that may be a possibility is to have UST as the sole market in Anchor and create highly liquid FX Terra lending markets (haven’t thought much on how this could be made). The basic idea is to concentrate all liquidity in Anchor to UST, and allow access to e.g. EUT, JPT by first converting them to UST via the FX lending market and then depositing them to Anchor. UST deposits will earn a 20% APY while other Terra stablecoins will earn slightly lower yields like 16%, 15% APY. Still is a highly attractive yield imo
4 Likes
I think Leo makes a great point, I would eventually like to use a centralised overseeing currency like SDR but initially get every currency in the globe to have a terra stablecoin and a forex to go with it which I believe is already being worked on in a smaller capacity.
I would love to get exposure to EUR.
1 Like
Same here. USD is unpredictable with that printing spree.