it is a great effort on your part. however there are variables not accounted for and hence i am disinclined to accept the calculations.
for example:
so in reality we won’t even see any slow down in depletion.
Will there be a ceiling/floor to how low or high earn apy can go? It will certainly go down and an apy around 7-10% might make Anchor lose its appeal and so is UST’s. As more than 60% of UST’s mcap is deposited in anchor
Nope, degens will have to deleverage, since each loop will yield less and after a couple of loops it’s no longer worth it looping more because of the fees
Sounds like a better idea but you might want to have a1.5UST since any yield below 15% for a stablecoin will likely lead to a large drop in UST supply due to higher yields elsewhere.
fees in terra are very low. so i disagree.
???
Lmao they’re not low by any means. Compared to Ethereum, yes. Compared to Algorand, Polygon, Fantom, no.
If anything, they’re medium.
When ANC was pumping, and it became net positive to borrow. Borrowing did increase.
It was laid out pretty clear:
It’s being audited right now and should be done if the poll passes. It’s simple change that actually simplifies the current code.
This assumes we don’t add more collateral types. It’s a good baseline for if things continue how they are though.
Flipside put out bounties for better projects for different scenarios that should be done early next week and I’ll share here. @fig can you confirm?
I do agree that this is the right move to get Anchor more sustainable.
Can confirm. These will be asked this week and are expecting answers by Wednesday.
Will share here once graded and proofed.
I think we should also take a quick step back and consider the purpose of Anchor Earn and Borrow. Earn of course was created for yield on stable assets like UST, and Borrow for leverage on variable assets like Luna.
The MIM Degenbox and similar strategies allow for leverage on a stable asset, while simultaneously making UST less stable. In a perfect world, they are safe strategies, but with yield depletion and minor depeg risk, they are actually just as risky as Borrow positions.
What that means is they rely on Luna’s success, Ironically, they also put it at risk.
I think it’s certainly possible that the Anchor devs did not think about this scenario when making aUST free to leave the protocol. Perhaps there is an outside use for aUST other than leverage, but whatever it is, is it worth risking the competitive edge, reputation, and frankly the user funds of the Terra ecosystem?
This reply strikes me as disingenuous.
Banks do make such high profits, giving only 0.25~4% back to depositors . As DEFI replace banks system, the APY is fully giving back, I think there must be a way to be sustainable other than changing what makes Anchor so special and different from other curve lending platforms.
Could the deposited UST which is not used by the borrower be used for extra safe investment/farming?
What about dynamically limiting the Earn deposit amount ? based on a sustainable lend/borrow ratio, where the ANC coin could play a role. I am no expert.
I’m inclined to leave the rate as is. It’s a great marketing tool and it’s working. Has calcs/analysis been done to see value benefits are outweighing the spend form yield reserve? I feel a lot of people are too focussed on fiddling with the rate rather than find ways to build / expand protocol and ecosystem to bring protocol revenue into the positive. 20% is the goal, don’t move the goal posts because it’s easier.
the rate the vote is going it probably won’t reach quorum.
The rate of depleting the yield reserve depends on other factors, such as the utilisation ratio. Would it be cleaner to adjust the earn rate based on protocol utilisation, instead of the yield reserve which could be a lagging indicator? If utilisation ratio is low (borrow activity is low), this could be an indication to reduce the earn rate in order to reduce deposits and the amount drawn from reserves.
Really well thought through proposal. Obviously the rate will have to drop at some point, so it’s nice that this proposal would help ease into that drop in a somewhat predictable way. Nobody wants to be in a situation where the rate has to be dramatically dropped in one fell swoop…
I am a fan of this proposal, but not right now. There are a number of other things that need addressing before rolling out the auto rate adjustment (which is of course going to be continuously lower).
Why is the proposal below being overlooked by Anchor team?
This is the lowest hanging fruit for addressing the yield reserve decline, by a country mile. And it is specifically vital to address it head of the AVAX Anchor release.
Building and expanding the protocol/ecosystem in the meaningful way that we all intend it is to create billions of dollars in normie UST transactions outside of Terra DeFi that create a use case moat to defend the peg. Sort of like a giant bloated slow moving ball of UST unaffected by Luna price. This is simply years and years away in my opinion. We are all in a crypto native information bubble and falsely assume that the type of adoption we need relative to the type of current use cases of UST (Anchor 20%) is going to be easy or fast to achieve. Alice, Kato, etc are mostly pipe dreams - they are the correct steps, but in practice they are very slow moving steps. Anchor Earn APR absolutely must be lowered through this proposal asap. Forcing the goal posts to stay in the same place is to accelerate towards a cliff with no regard for the peg. If the peg breaks from UST outflows, Anchor is done, Terra is done. That is not a gamble worth making in my opinion. Vote sustainability over short-term greed - Vote Yes on #20
This is not the subject of this proposal. You are beating a dead horse.