The APR doesn’t need to be lowered ASAP. The leveraged looping needs to cease then we can get a clearer picture of how sustainable this rate is.
Does anyone know how much looped recursive leverage is coming into Earn right now?
We do know there’s around $750M coming in from Degenbox, I would guess there’s at least another $500M from other sources. Let’s nip it in the bud right now and we’ll find out.
The topic of this proposal is achieving a sustainable yield. There can be other proposals. You are beating a dead horse.
Nope. This proposal is about serving up a dynamic rate which is obviously going to be lower (as of now), ahead of the pile of other proposals that actually aim to achieve a sustainable yield.
It is shameful we’re at this stage given all the proposals that aim to fix the problem have been swept under the carpet.
It seems TFL/LFG and the Anchor team are on totally different wavelengths.
Sure, can definitely appreciate it’s years away and its something TFL/LFG recognise already which I’m certain was mentioned when they reloaded the reserve with 450m. I would disagree this is short term greed issue and focussing on the apr is actually short sighted in the grand scheme of things. Yes anchor is the biggest money market on Terra but people conveniently forget the strides being made in UST adoption on other chains and their growing demand/appetite for UST. LFG have pointed out that they have 2 years of runway for supporting the 20% until it’s to be adjusted. A lot can happen in 2 years (especially in crypto), Anchor will continue to add more collateral assets, UST supply/cap will continued to grow not just within terra but on eth/sol/avax etc and we may even see a few protocols/markets on terra grow to similar size to anchor. The 20% is a great marketing tool and at the same time an unnecessary distraction. Nothing against you, but I’m not voting yes.
I know for an absolute fact that lowering the APR will achieve more runway. At the rate of YR depletion, we need this proposal like now. We can still work on the rest, but speeding towards a cliff gambling on other sustainability solutions isnt the right choice. We can always revert this proposal later if need be. And besides, it works both ways. APR can rise as well.
I think you mean you’re voting No. But anyways what is your source for this? Because if its Remi tweets…that was pretty hollow. I haven’t seen anyone else endorse that. Also when the 450 was added, the project runway was 9mos → 1yr. That has been obliterated and we likely have about 10 weeks left. So the runway projections are largely BS IMO.
The proposal is aimed at stabilizing by continuously lowering interest rates. The assumption that interest may rise should be completely excluded.
Currently, anchor protocol do not have a profit model to fill the yield reserve.
Yes that’s what I meant when I said " I’m not voting yes" haha. And you are correct, there is no official source for the 2 year runway except the tweet by Remi and I doubt that him being on the LFG council that he’s just spouting nonsense…Had he said 5 years, I’d be inclined to agree with you but having 2 years of money ready to deploy, I’d say that’s reasonable.
This offer isn’t about lowering fast rates.
A change to a dynamic rate is necessary.
And it’s not a quick offer either.
I don’t understand why you’re expressing a different opinion on this post.
It supports dynamic interest rates that allow for the fastest implementation.
I dont know if anyones mentioned it since im still catching up on all the comments but this does not make sense mechanically. There is no way to make a token untransferable and prevent other contracts from interacting with it without a blacklist that would have to be maintained. If you do want to go with a implementation similar to this though you can have a deposit function that gives you aUST that increases by 50/75% or whatever you want and a another deposit option that gives you no token that way only the depositing address can interact with it and cant be sent around. Not everything requires a token the contract will just have to take into account how much the wallet has access to. This will also let contracts that do not do any leveraging work like normal thiugh mirror and kajira would have to be reprogrammed accept UST instead of aUST so they can deposit it from the smart contract side. This also doesnt stop a project like stader with their lunax from coming up that tokenizes anchors 20% again without any limits. Theres no real way to prevent the 20% from certain types of activities as long as its offered.
oh boy do the forums need an overhaul, we need something more reddit-esque with a voting and trending and pinning features it’s getting hard to keep track of peoples thoughts and collections.
I am voting yes to this proposal. It’s the inevitable anyways and this would actually extend the runway significantly. The capital in the yield reserve could be deployed far more effectively and diversely.
I want to help shed some light into why some underlying risks might not be so much risks.
I don’t believe UST will ever depeg, if that is the case then the US dollar is at a far higher risk of ‘depeg’ than UST and perhaps thats actually the effect we are seeing anyways. But its a mute point for better.
Just know that your UST is now backed by bitcoin, so take some comfort there.
xAnchor will be a major driver for borrower demand cannot wait to see it.
This proposal benefits the Anchor community in the longer term. Anchor does not need to support above market rates to be competetive it offers its own unique sets of advantages versus other lending protocols.
We need to focus on getting yield bearing stable assets up as collaterals that will drive yield. This proposal helps buy us time towards that goal.
Well said , me too , i get it.
With the yield reserve depleting at a rate of 3.5-4 million a day I think we need something much more aggressive in the short term. My calculation says we have 3 months to go before we start begging Do Kwon to top up the yield reserve again ! I wonder why this proposal didn’t come earlier before the top up to 507 m yield reserve.
I dont know , it like if you are asking me
Does secret network , the void , and other ibc channels relayers ,
have enought anc veanc ust aust luna, bluna ,lunax boosting apy in fund community and warchest ?
I dont know.
Really dislike this proposal. Anchor’s competitive advantage is a STABLE deposit rate. If we switch to a dynamic rate we’re giving up on that advantage. Prop 20 would lead to a higher APY during bull markets and a lower APY during bear markets. But is this really what we want?! The whole promise of Anchor was to build a protocol where “Anchor’s deposit interest rate stabilization mechanism offers additional protection from volatility by providing stable returns” - as quoted from the whitepaper.
I am not opposed to reducing the deposit rate to a more sustainable value, or implementing a minimum deposit rate. What’s important though, is that the STABLE element within Anchor remains.
For more context and a more in depth explanation on why Prop 20 specifically is a bad idea, have a look at my twitter thread: https://twitter.com/fulltime_crypto/status/1505285043769561090?s=20&t=tlz1GcKQSEJd09frTj-pUw
Well, first of all I think making this move NOW will harm the adoption of UST and thus of Terra and LUNA. So this is the wrong moment for this. It makes a lot more sense to keep up the 19.5% for another two years and announcing the change of policy a long time ahead, so noone will be surprised or disappointed. Introducing this change so suddenly now, especially right after there were half-official hints that the foundation is willing to sponsor the profits for another two years will lead to negative impact of the whole ecosystem. What is needed is a clear statement from the side of the foundation (how long they are willing to sponsor the rate and what strategy will come after that), so depositors can rely on something and also the foundation will probably see steady growth in UST leading to increased LUNA prices, allowing them to sponsor the yields and adjust the system slowly to reach a sustainable yield. I don’t think that lowering the APR is the right solution at the moment. More actual yield would be a good answer. Maybe a lock-time makes sense two, so the money could be invested elsewhere while deposited, plus a fee when taking out the money maybe. Well, I’ve not modelled this properly, but I guess someone can do it. I’ve voted NO.
Seems sensible. By
min(abs(x, y))
do you mean
min(abs(x), abs(y))
?
Agree, a lot of what holds up demand for UST is Anchor’s interest rate.
Implying that “i can’t sustain this rate” is what’s considered a vote of no confidence.
Is LFG, TFL worried they cannot keep paying out this 19% interest rate?
If they are then that simply is a vote of no confidence.
Once Anchor reserves and LFG reserves are precariously low, risk management dictates that one should start to redeem UST back into other stables in other to be the first out of the door.
This will deplete the 3crv pools.
Simultaneously, some will choose to burn UST to mint Luna, and sell that Luna to obtain their USDC/USDT/DAI back.
LFG may sell their BTC reserve to buy Luna, holding up Luna’s price to some extent.
Some of LFG’s reserves however are also committed to topping up the UST reserves in Anchor and remains to be seen whether it can sustain both fronts(paying UST reserves, holding up Luna’s price) especially during a volatile time of no confidence.
remains to be seen… we all saw what just simply having no confidence does to MIM and liquidity drying up.
I think if this proposal is accepted, it means that many people have not understood what is written on the whitepaper.
(I recommend reading it)
By saying this, I am not saying that it is okay, but that something must be done to make it more sustainable.
In the whitepaper it is written and mentioned several times that they want to provide a stable rate of return so if you fail in this it means that you have failed in the mission. I’ve voted NO.