I’m Jordan, head dev at Advias. We’re building a protocol that integrates into Anchor Protocol on blockchains outside of Terra. Thanks to the Anchor team for making this possible along with the team at Wormhole.
I want to introduce what we’re doing and quickly go over some of the key points I think are important. Stick to the end because some of this may sound ridiculous.
Advias allows anyone to take out a debt position with an ultimate APY of -10%, yes a net-negative APY. Stick with me here…
Rate this 1-10 on how believable this is.
If you took out a 6% APY loan on 100,000 worth of AAPL stock and by year-end, AAPL was worth 15% more, that’s a -9% APY.
Except, ours is powered by Anchor Protocol.
This may seem too good to be true and if you think that, prepare to be flabbergasted.
What if I said that was the bare minimum?
Has the rating increased?
That was the original concept but quickly my mind started weaving and bobbing and connecting blockchains to blockchains in my own mind’s metaverse and I realize… I could help borrowers on Anchor remove nearly 100% of their debt risk.
You’re at a 0 rating probably?
THAT’S IT, you’ve gone too far!
But here’s how…
Starting : 100,000 UST
Debt Responsibility : 20,000 UST
Ultimate Debt APR : 20%
Starting : 90,000 DAI
Debt Responsibility : 9,000 DAI
Ultimate Debt APY : 10%
How does this remove nearly 100% of debt risk?
Now, removing 100% of the risk is impossible but assuming UST debt and the Advias collateral rate is 20%, we can take a lot off.
By depositing the debt from Anchor as collateral, you are now paying the debt off. You also now have 90,000 DAI (responsible for 9,000 DAI) (or another stable asset) to work with.
I’m going to have to do it one more time but instead this time, head over to our gitbook so you can look further into it.
The strategies are endless alongside Anchor, lending pools, and bridging.
Again, a huge thanks to Anchor and Wormhole for making this possible. Along with all the other parties involved.
Aside from the strategic focus of borrowing, Advias also allows standard lending and borrowing.
Lending will work like this:
Lenders will deposit an asset like USDC and we will balance it between bridging to Anchor in return for aUST and our lending pool, the user is minted an avasToken similar to aUST or AAVE’s aToken or Compounds cToken. Our rebalancing algorithm does all of the work in order to ensure the interest rate lenders receive is stabilized, let’s say around 10% APY.
Borrowing will work like this:
Borrower deposits UST into the UST lending pool, although, UST is not a borrowable asset and the lending pool for UST is discounted below other stable assets by design. This is a borrow-to-deposit abuse preventative, and incentive for other assets.
They can then borrow other stable assets at a 90% LTV at an interest rate about equal to the lending rate, say about 10%.
When the borrow is initiated, the avasToken is burned and an avasCollateralToken is minted. the avasCollateralToken receives the full 20% APY the AUST will generate.
A quick note, UST deposit rate will not be 20%. The excess interest rate appreciation on UST deposits to the lending pool is sent to our Liquidity Vault to be used for liquidity to lenders.
At this point a borrower that deposited 100,000 UST would currently have:
- 100,000 UST in collateral at 20% APY (appreciation)
- 90,000 USDC in debt at 10% (accrued)
From here, users and defi integrated defi applications can do strategies like increasing your API to 29% or increasing LUNA holdings, all at minimal risk.
These income strategies are why we built this protocol.
We are still about a month or so away from launch so if anyone has concerns they think we should be looking into, let us know.