Fellow LUNAtics! For a protocol leveraging the earn side or Anchor, How do you propose they incentivise the borrowing side as well? As an ANC holder myself I see many platforms promote the lending of assets but not the borrowing which is essential to sustain the apy.
Emissions of the platform token is one way. Looking for more innovative ways to organically build the reserves.
I would love to see acceptance of LP tokens as collateral. LUNA/UST LP tokens would be a much more attractive asset to borrow against as the volatility is cut in half, reducing the liquidation risk. I know the current anchor model isn’t well suited for this, but if adapted this kind of strategy could see huge borrow demand and anchor would contribute to LUNA ecosystem stability by promoting deeper liquidity.
We will get there. Curve LP tokens with UST coming in the future!
Wow! That will be a huge unlock for the ecosystem!
That’s great to know! So all lp fees will be redirected towards the reserve?
To incentivize borrowing you have to make borrowing cheap. It’s that simple.
The problem is that it has consequences…
Or change the risk profile, like MARS protocol where your LP collateral generates yield (position gets safer over time). Anchor can take a cut. Keep Anchor Earn high since LP yields are generally very high.