Emergency ! new terra degen box strategy

**EMERGENCY !!! **

A new DEGEN BOX STRATEGY is about to be available in the terra ecosystem.


This is a new “IN-HOUSE” degen strategy leveraged by the EDGE PROTOCOL. ( check the link fur further information)

In my opinion it is necessary to take action immediately.

According to the medium article its is possible to ear a fat 67 % just looping stablecoins with ZERO risk.
Nothing can beat this, not even the most elaborate Anchor - Mirror -white whale strategy.

The sad truth is that this trategy and their users will rapidly drain Anchor yield reserve without providing any collateral or borrowing any ammount of UST.

Because we can not stop people coming up with this kind of things we have to protect ourselves otherwise Anchor and Mirror will not last even a year.

As other users have already proposed IMHO its necesary to fix the anchor reward mechanism in some way.
One idea could be capping the yield on the UST deposited to a 8-10% max and giving to the lenders only the possiblility to stake the Anchor tokens on special vaults in order to reach higher yield from the UST deposited. it is important also to give High reward only to the UST that are backed with a deposited collateral; for example if you have 1.000 UST worth of Luna deposited you can achieve an higher yield only on , let’s say, 1.000 UST deposited reaching 20 % if you stake till 10% of the UST deposited in the Anchor vault. ( NO MORE FREE CANDIES FOR EVERYONE)

Please think about that it’s up to the comunity to save the protocol for us and the future users.



I agree this is a huge problem that needs addressing. However, this Edge Protocol relies on a UST supply rates being low. At 18% it is not a strategy that makes any sense.

The bigger issue is that aUST can be used as collateral for borrowing against CDP stablecoins like MIM, MAI, cUSD, kUST or similar that allows people to pack Anchor with looped recursive leverage.

My suggestion is to lock aUST down to Anchor / Mirror to prevent UST being continuously looped back in from outside the core applications.

However, if TFL are happy to keep topping up the yield reserves, then everyone can fill their boots with leveraged 50-100% APY while they’re paying for it.

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not sure how this is possible; note that anyone can easily create their own aUST wrapper token, which can then be used for looping elsewhere.

if it were feasible, i’m probably directionally in agreement.

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deposits already picking up big time with no follow through on borrow. doesn’t seem like a new degen box strategy will be good for fundamental health of protocol

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There would need to be a changed to the aUST token mechanism to make it non transferrable.