Call for ideas: how to encourage more borrowing?

Mechanism
21

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.

2 Likes
22

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 doesnā€™t make sense for what Iā€™m talking.

Are there extraordinary technical challenges to doing it?

1 Like
23

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.

24

Have more to borrow I mean?

We have
bETH
bLuna
aUST

And virtually nothing else - this effectively means we wonā€™t see borrowing from assets we donā€™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 itā€™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 itā€™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

25

Itā€™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.

26

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