Call for ideas: how to encourage more borrowing?

Also, regarding the framework that’s in place for adding bAssets - following IBC upgrade next week the Cosmos ecosystem will experience a much deeper shift in liquidity and composability thanks to UST.

Therefore is there a reason not add bOSMO as well as bATOM as new collateral? 2nd most DAU’s and Osmosis Zone will be a driver for UST adoption - seems like a no brainer.

https://mapofzones.com/?testnet=false&period=24&tableOrderBy=totalIbcTxs&tableOrderSort=desc

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The short answer is that this is not possible in the current form of the application. Please read the anchor docs and you will understand. Collateral must be staked at a validator so free luna can’t be used for this. bluna is staked at good validators. Neither can staked luna be used for this because you don’t have control over them.

The necessity for yield bearing and interest bearing tokens

Curve and yearn created a very complex method to achieve this by creating there tokens to be composible across multiple pools

In this example we take the Iron Bank (aka cream finance) which is part of yearn.

Examples

cyY3CRV

cyWETH

Curve ibEUR

The reason I bring these protocols up is for good reason - as of right now ethereum dominates the stablecoin markets specifically because no other chain has such yield bearing stablecoins.

An incentive to hold anchor - could be the option of instead of paying out anchor in borrowing they are locked into a vesting vault - which you could implement a yield bearing anchor token specifically only acquired by vesting anchor tokens to obtain and the exchange is the anchor rewards for this yield counterpart

Good shout, would be good to cover this in the AMA call.

bATOM I think is already planned, dunno about bOSMO

I understand very well, my point was that borrowers need to 1. trade Luna for bLuna, 2. provide bLuna into Anchor. 1 and 2 should be combined into a single smart contract call, with the swap happening automatically e.g. via Terraswap.

Same with ETH - users should be able to 1. trade ETH for stETH/bETH 2. bridge that to Terra 3. provide that into Anchor, all in one smart contract call via Metamask. Then they should be able to borrow UST that automatically gets bridged to the chain they started on.

The technicals stay the same, only the intermediate steps should be abstracted into one action. Same with repaying/withdrawing - just going the other way.

Agreed. To me, this seems like a simple no-brainer that covers both the “Drive ANC Value” and “Drive borrowing demand boxes”, unless there is something obvious we are missing, bANC should be there already since it is ANC lol.

bOSMO is also a great idea since it is quickly gaining TLV and market cap and most likely will be the default dex on cosmos. There are also generous rewards that many people might want to borrow against. It would be a great win-win for both platforms.

100% As mentioned, the more clicks the less likely people are to do things - pretty basic. it still would be two contracts. The question comes from a coding perspective: is this possible on tendermint to run two contract validation simultaneously on one click and charge a compounded gas fee from the user’s wallet and split that as it comes out to each validator. In theory, it is, as in Acala test net you get an LP token and stake in a farm all in 1 click - this is where we should be going.

To attract borrowers who enjoy the stability of staking yields and still want to be exposed to the price action of the underlying. We could have a vault where the deposited assets are borrowed against to buy yAssets on Prism and be safe from liquidations with a Nexus oracle type set up.

Unfortunately, this wouldn’t work as the key to ANC protocols earn rate is taking those staking returns as a form of payment for net positive borrow APR and earn yields.

That’s why you’d post them as collateral. Then use the borrowed money to buy yAssets.

Was it clear to anyone on whether bANC is even being considered anymore as a bAsset? I don’t think I heard a concise answer or even any info in regards to the development of bANC?

Ryan did say (vaguely) that they are working on bAssets that were reliant on Wormhole, which obviously must mean bSOL and bBNB (Matic still under development for Wormhole integration).

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Hi, I am very new to this community and I’ve only been in crypto for a year. I’m trying to learn how to live off of my investments, and this is exactly what I am interested in. On a much broader aspect, I’m actually interested in borrowing crypto to buy a house. But I don’t know where to start. Is that at all possible?

Hello people !
This is my first post, and I’m glad to participate.

What about allowing to borrow in other blockchain coins.
As different bAssets are linked to Anchor, allow to borrow those assets as well, in a lesser amount than UST of course (like 25% LTV MAX before liquidation).
This could allow users to tryout some other blockchains, that are to be linked to TERRA environment and widen the Anchor application use cases.

Have a good night/day :slight_smile:

What if there were deposit limits for Anchor Earn based on the amount of ANC you staked?

For example, if you staked 100 ANC you can deposit 1,000 UST.
Of course this is up for discussion, and is merely a suggestion - perhaps even the first 1,000 UST for Earn doesn’t require any ANC staked (so that it is still accessible to beginners).

This might encourage more borrowers since they gain ANC by borrowing, thus allowing them to deposit into Anchor Earn; as a result this may help with the deposit to borrow ratio which many have concerns over due to the rapidly decreasing Yield Reserve. This further also increases ANC’s utility.

However, I have no idea if this is possible to implement.

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We really need to separate all concepts of Earn requiring ANC tokens for any reason.

It is a bunch of unnecessary agro for people to be forced to purchase a volatile token.

As an example. Crypto.com offer 14% APY on stable coins. Sounds good right? However, unless you own X number of CRO tokens the rate is 10% APY.

Immediate closure of website.

I’d argue that Earn’s lifeline are borrowers and therefore we should encourage more borrowers by putting what they get to further use.

I do understand your point of view though.

I agree. I am all in favor for any suggestion that gives the ANC token a boost and more utility.

However, to throw it over to depositors to pick up the slack is a big ask. The main attraction for depositors is the simple interface and the fixed (currently high) yield.

As soon as you throw in uncertainty (volatile token), and complexity (buying it and staking it) it will drive users and UST out of the system.

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Earn should not be made more complex, if at all possible.

I see two things that should be implemented.

1 - Move to a 70-75% LTV
2 - Build a liquidation protection feature into Anchor where borrowers an use Earn funds to pay down a loan if the Oracle price his a certain level.

Has this liquidation prevention feature been discussed here before? I know Nexus was going to offer it but there form of doing it doesn’t make sense for what I’m talking.

Are there extraordinary technical challenges to doing it?

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Yes, the liquidation protection idea is on the table. I think the discussion of flashloans is something we need to discuss more as this can help generate yield for idle UST on the earn side but also allow for a liquidation protection mechanism to be built in. The projection mechanism could be a community grant once flashloans are live.

Have more to borrow I mean?

We have
bETH
bLuna
aUST

And virtually nothing else - this effectively means we won’t see borrowing from assets we don’t have avaliable to use.

bsol and batom are in audit this is great

the upgrade to include stLuna this was great as well

The proposal to allow blunax also then allows further evolution of LPs -

Anchor could even then establish a POL - Offset

But acquisition of
stLuna - continously compounding lido derivative
blunax - inevitably is exactly as stLuna with the luna yield to anchor instead a la bAsset


Now it’s time to think into the next step

More bAssets [this literally is non negotiable for long term viability] this has to happen

We then look at the bAsset development documents

[Clear communication of this - progress would most likely ease many users] as anchor announced producing a bAsset on boarding documents to ease the load and help increase the speed of execution

Anchor uses kujira - so naturally bkuji yet another bAsset
Followed with bAnc because it’s almost inconceivable anchor has not produced more utility to anchor token itself

  1. example of making bAnc use case more prominent with a incentive to hold - think on weighted and locked governance for the regular anchor governance token

Locked duration of time - in theory this gives weight Guage proportionate to held assets and a larger % for longer time locks -

Now this is similar to yearn using a backscratcher that then boosts the yield of user for allocation of locked asset

It’s not such a problem if ANC were not volatile. But right now other than governance ANC is basically just a throw away coin that immediately gets dumped for UST.

If ANC both gets more yield and gets a steadily increasing demand and hence price accrual people will not have a problem holding it for bonus yield, higher deposit limits, or borrowing discounts etc. Personally I think if maximum deposit was 10x ANC staking or 10% ANC staking got you a 5% increase in rate it would create a large and steadily increasing demand for ANC so the price goes up and those who staking it for the duration of their deposit / loan will be winners in addition to the EARN savings interest.

Is using ANC the best way to increase borrowing? IDK. Probably for me long term fixed rate close to 0% or below inflation plus some kind of reasonable delay before liquidation or very robust automated system to preempt it is necessary.

I will link threads were I specifically discuss the exact topic of this thread.