That is the problem, anchor won’t profit and generate revenue if BTC gets implemented like bLUNA, bETH, and wasAVAX.
Current distribution APR is only 7.5% and Borrow APR 13%, 6% profit for any asset now.
Excluding staking imports has a positive effect on the protocol. ANC distribution does not produce more as assets added.
you haven’t included APY of underlaying asset, around 10%, so distribution APR is 7.5, and borrow APR is 13%, so 6% of the profit on loan but you haven’t included profit of collateral which is 10%.
Yes. It’s not that there’s no profit. lower than bLuna, bETH. So not bad thing for anchor.
I think the focus with xanchor is to operate like a traditional money market and offer 0% rates by offsetting the increase in collateral value (for assets like stavax, bluna after upgrades are complete, steth)
This allows anchor to offer a variety of assets as collateral not just yield bearing but IV increasing. It’s what the entire market is trending towards. Bitcoin has a unique characteristic as a reserve currency like gold or dollars so it would only make sense to offer loans for it.
Eventually it won’t be profitable to borrow UST on anchor and deposit for aust as anchor moves towards a more sustainable model. The new idea is to accrue anchor which would capture sustainable value through features like vote eschrow and rev sharing.
But the point of Anchor is not to be a traditional money market, it’s the point is to give a stable high yield to attract new users. The money market allows any collateral being able to be used for borrowing like on edge and mars.
If we added LP pairs for the collateral it would help hugely, change more to abracadabra money, if we used LP pairs that give rewards like from MIR, we would generate way more profit, and since the price of LP pairs is more stable, people would be able to make better loans.
Then after we get profitable, we add non-yeilding collaterals.
We have idea’s in the works in the community like this one here:
these other collaterals take time and liquidity before we can roll them out. Bitcoin is low hanging fruit and won’t be the dominant collateral on Anchor (it will always be Luna). So it should be fine to roll out now, it helps us get these other ones onboard at a later date.
I think having OHM token and its forks as collateral is great for collateral, bcs when you sell you get huge returns, and fees from liquidations if the price goes to shit. Let’s profit from greed
This would be a better proposal for Edge protocol or Mars protocol on Terra.
I agree, here is filler text
We really need to increase the loan interest for non-yield generating collaterals like BITCOIN. Would have to be at least 19.5%.
If not, everyone who owns BITCOIN will ask for loans at 13.5% and put them to work at 19.5%. And then, Anchor will loose automatically and instantly 6%.
Thats a fact. Not a posible income. FACT.
This old basset model is being depreciated in favor of more capital efficient liquid staking derivatives such as sAVAX, LUNAx etc where the protocol take no rewards. So BTC can be the one exception here.
Problem is that with that model in order to maintain interest pegg, without yield reserve, which would most likely be gone in this model, rates would be huge, 10%-30%, and most of people wouldn’t borrow with these rates, so rate would go even more up, since people would leave system.
I think the veANC will be next proposal. not BTC collateral.
new asset is not helping for anchor protocol for now. @bitn8
Yeah veANC up next for sure.
BTC tabled for now I think.
When will live? I want to lock my ANC 1 year and don’t want to see the price… @bitn8
contracts are being audited. A new v2.1 borrow model shall be presented soon!
Won’t a v2 anchor model make the anchor earn yield even more unsustainable if the yield on the bAsset will be kept by the borrower?
It would. For sure. Is that planned for v2?