Call for ideas: how to increase the value of ANC?

Mechanism
21

The recent Bitfinex listing is definetly a step in the right direction. The name of the game is exposure and awareness, and the easiest way to market a protocol has always been by making the underlying token readily available across the market (as a bulk of the market is still CEX heavy).

If tokenomics would be an issue, then MIR would not have been listed across the market in months 5-6 post-launch (plus some of the most highly inflationary tokens are listed across every tier1-2 exchanges). If the protocol can’t sell itself at this point in regards to ANC listings, then I’d assume we have an issue.

It’s the first cross-chain PoS savings bank with nothing else on the market that competes, this should be an easy sell. Obviously a native listing would be optimal for an easy transition to the webapp and governance, etc., but any exposure is good for awareness and future participation.

22

Building upon this idea from @clorophilla:

One topic which can be discussed is to implement certain tiers for borrower interest depending on the amount of ANC they have staked (e.g. <1000 ANC staked represents -30% from standard borrow interest). This way they would be incentivized to keep ANC and restrain from selling borrower rewards.

I wonder if a more elegant way would be to require borrowers to hold a minimum % of bANC as their loan collateral? E.g. 5% or 10%. This adds massive productive demand to ANC, without requiring the user to hold what can be perceived as additional dead weight.

ANC might fluctuate in value during the loan so perhaps there can be a requirement that the right level of bANC only needs to be there when the loan is taken.

@bitn8 you also had some ideas here, what do you think?

23

I think we probably have to be careful here as the lending side drives the protocol revenue. It’s a great idea in theory but it complicates the borrowing process that I think still needs to be further simplified.

That said, maybe it could be worked in as an added layer for those that are already active users gov stakers and doesn’t change the standard advertised rate and acts as a coupon discount for those that chose to activate it? This would use a decent amount of resources to build and we would have to weigh the cost-benefit of that. Just guessing, but it’s probably somewhat higher up the latter than other low-hanging fruit.

I think another idea that would maybe have a similar impact would be incentivizing the b-ANC loan rates at a slightly higher reward than other b-assets so that borrowers and protocols like Nexus would have more incentive to bond the rewards than sell them. Obviously, ANC will still be sold at some point, but the more ways to give it a return the fewer people will sell it and therefore drive the price with a virtuous cycle.

1 Like
24

So I think the first step is to reduce the sell pressure from borrowers, then the liquidity can be cut down (making buy backs more effective at increasing price) and the emissions for LPers can be cut down as well. Another thing people should consider is you wont have community governance without whales doing all the heavy lifting.

So one idea is to have ANC lockups in which your borrow can get a boost on the ANC distributed, this incentivizes the people who really matter to the protocol : borrowers and governance. LPers are WAY over compensated here and there doesn’t need to be this much liquidity if we get rid of the constant sell pressure from borrowers.

For example you can get a ‘boost’ on your borrow emissions by locking ANC up with either a 21 day unlock timer or fixed time intervals. What this could look like is: lock up 1000 ANC, get a 0.05% boost to you ANC borrow distribution on $1000 borrowed. (these numbers can be more carefully balanced, just throwing them out there).

So with current 25% borrow, 25% distribution borrowers net 0% loans. By locking up their ANC they get positive APYs again (however these gains cannot be realized, and they dont need to be as Luna is going up in price and the market is bullish).

2 advantages is borrowers are ACTIVE participants in the system, they are the people who will participate in governance much more than hodlers. You also greatly reward them for this activity and for holding the price up (which is what you want) instead of giving it to pool2 and people taking ‘self repaying loans’.

tldr make the power users paper rich and youll get better governance participation and community as well as less sell pressure

lmk what you guys think.

1 Like
25

ALSO:

  • Put ANC into Osmosis/Sifchain/Emeris and give good incentives…so at least one part of ANC is short term locked

  • Make bANC as high priority

  • Use part of yield reserve for ANC support? For instance if Yield reserve is rising, than increase % that goes into buyout of ANC.

  • ANC listing on different CEXs

2 Likes
26

Agree with those except for the yield reserve usage. We need it to grow as much as possible

27

I agree on the key concept here and it seems the majority of the community keeps coming back to the general idea of varying ideas for “better rates on borrow/lend by locking up ANC”.

I think we need to keep this conversation going, understanding the key here is to still keep borrowing and lending as simple as possible because it drives the revenue. To summarize a few key points that are similar:

  1. Make protocols who use ANC have to stake a certain amount of ANC
  2. Yield Curve Money market that users with staked % of ANC get the highest rewards
  3. Better borrow rates for staking ANC

I agree that on the surface this is basic economic incentives 101. However, we have to be mindful of a few things here:

  1. The build complexity and cost vs other ANC value driver builds
  2. The UI simplicity for users
  3. The UI simplicity for B2B

I think if we went down this road, it would probably be best to focus on the earn side rewards for ANC staking and protocols using ANC for yield.

Also, how do we keep Anchor simple still if we implement a somewhat complex tiered rate structure requiring staked ANC to get maximum returns?

I agree and I also think we should look into making b-ANC have higher borrowing rewards to further incentivize bonding it. If b-ANC paid a slightly higher borrow rate than other bassets, it would be less likely ANC is sold for paying down the loan, etc.

Agreed. I have been talking about this as well. And also asked on Agora why ANC wasn’t included in the OSMO reward incentives proposal. I have also been looking at Sifchain and perhaps if anyone is connected there they can start some talks?

Also agree we need to look at this. However, first, we need to get a yield curve money market structure in place to lower draw on reserves as well as more b-assets to increase borrowing demand. Also the above points of lowering returns for those that don’t stake ANC.

Then I think we look at modeling out what 15-30% buybacks look like. 10% is just too low and users are incentivized to take advantage of higher rewards at the expense of governance and token holder value - mercenary style tokenomics.

I also agree we can get creative and have a dynamic buyback rate based on a 90 weighted average of yield reserve percent change. For example, if it hits certain weighted average percent increase thresholds over time it can raise x amount so that it dynamically adjusts based on market and borrowing conditions. I’m sure with some gigamath brains we can work out something simple that works. But I don’t like static things in hyper-dynamic space.

28

Also, if staking rewards increased over 10% we could look at creating self-paying loans for users that stake or already have staked an equal amount or greater of ANC into governance whereby staking rewards pay down the loan. It would have slight selling pressure from selling ANC staking rewards to UST but overall would encourage holding greater value of ANC in gov. which the demand of would far surpass the small selling pressure.

1 Like
29

So let’s translate all these ideas into tasks and give them priority. And then push it toward governance vote? Or will this be Matthew Cantieri job?

We need to be concrete. Community can help. But let’s sync first.

1 Like
30

Agree. @Kamil and I will go through soon and put together a consolidated list of ideas. Ideally, the community will then vote on importance. We will take it to the TFL ANC team and get their take on it.

Also #ANC Community, deeply thank you for all the support you put into this. This is what is going to take this platform to the next level. Let’s keep it going!

3 Likes
31

I love the idea that ANC-dependent protocols should take some portion of governance of ANC (B2C solution).
This can not only promote the value of ANC, but also allow them to protect their protocols’ profit by voting to a certain policy changes which might be not aligned with their protocols. I think there are already several protocols in Terra ecosystem which are utilizing ANC as their yield driver (Pylon, Orion, Kash, etc.).
I have made similar proposal on Pylon forum (2nd bullet point), so take a look if you are interested.

1 Like
32

Wanted to link my post about Protocol Owned Liquidity here, as it seems relevant.

2 Likes
33

Opening up multi currency stablecoin deposits into Anchor EARN will de-risk currency exposure to $USD and open the opportunity for users to hold their deposit in their native currency. This will open the door for self managed super funds, mortgage offset accounts, bank savings etc to flow into Anchor

34

To be able to provide the 19.5% APY on other currencies anchor would need to have multiple pools and borrowers would need to choose to which pool they would be providing the collateral too, fracturing the platform and making it extremely unbalanced and a poor user experience, there’s almost no demand for other currencies unfortunately. If not that, then anchor would be exposed to the UST volatility against other currencies and that’s not the goal of the platform.

There have been talks in the past about a money market, that would allow you to use anchor earn in other currencies, at a lower APY, and that money market would take on the volatility against USD and profit from FX traders while anchor would only be exposed to UST still. That still needs to happen before anchor can safely open up earn to other currencies imo.

35

Hi I added a new thread

36

Not sure if this works but here is an idea:

  • Creating a non-tradable xANC reserve that will determine the price floor for ANC token
  • A small portion of daily ANC buybacks could be taken out of circulation and move into this reserve
  • Ever increasing reserve liqudity can be used to capture some more ANC emissions to create more momentum on the process

Maybe this could be an insurance pot later on?

37

Some think I could think of to increase demand for $ANC holders:

  • give higher yield to earn for $ANC holders
  • give lower yield to borrow for $ANC holders
  • get some of the profit from earn/borrow to $ANC holders
  • increase yield for gov stake of $ANC holders
  • use $ANC holders as collateral
  • If anchorprotocol issues a debet card like crypto.com, then give $ANC holders a % cash back.
  • Give free Spotify/Netflix/Amazon for $ANC holders. (using debet card, just like crypto.com)