The main obstacle for borrow demand is that LUNA is an extremely volatile asset. It’s very difficult for a user to manage that risk, because even if they have spare capital elsewhere they have to manually move it very quickly over to Anchor.
One way to reduce users risk would be to integrate limit orders into the protocol. For example, let’s say a user borrows against their bLUNA, and now they have UST in their wallet with a liquidation price of $50. The user could deposit that UST into a limit order of their choosing, let’s say $55 in this example, and when that limit order is filled the protocol would automatically convert it to bLUNA and deposit it into the users account, lowering their liquidation price. This would make borrowing a much less risky proposition for users, and would allow them to automatically buy dips that help them secure their position.
Another variation on this would be the UST can get deposited into Kujira, and upon winning the auction the bLUNA automatically gets routed into the users Anchor account to secure their position. Maybe this is simpler to implement because Kujira is already fully functional.
If we help users manage risk better through automated tools, they will come back to borrow.
The gap between collateral and deposits will only widen. Does this not surprise anyone? Masses will flow to less risky strategy always.
What Anchor needs is a stable yield bearing collateral option.
This Kujira integration sounds amazing especially since it’s already connected.
I know Kujira is looking for premium features to boost the value of their native token. This could be one idea that would garner a lot of interest from not only buyers, but also borrowers.
I like the idea but as it stands right now there are CLOB built into the terra ecosystem. We would need to build this out first or have a dex like Astro, Loop etc build it to then plug into it.
Perhaps a good way to use community funds?
Not sure what CLOB is, but I get it, it’s not that. I thought maybe Kujira could handle a lot of the heavy lifting since it’s a win for them too. Anyway, as I stated on the other thread, your cross-chain plan is solid, and I agree that should be of utmost priority. If you build it, they will come. Then there will plenty of fundage for all this fun stuff. We’ll keep teaching degen-larva how to manage manually until
Central Iimit on-chain order book - it’s what you need to be built out for limit orders. Think Serum on Solana, it’s something we need here on the Terra Eco-system. Not sure of this will be built into any new protocols. I pushed Loop to look into it. Maybe Kurija could build it or Lighthouse… community grant.