I am interested in hearing from the community about if isolated pools for smaller cap token projects would be of interest, the way this would work (at least in my head):
Adjust risk and borrowing / lending curves for higher risk assets.
Adjust LTV for higher risk assets.
Remove fungibility of the isolated aust token
Disable governance functionality
Add in the desired low cap tokens to be deposited as collateral.
Set deposit interest rate to variable
From there we would let the pool be open to the market and once liquidity of the tokens is high enough on Terra we can consider moving them off isolated onto the rest of the anchor stack. We can also monitor liquidations / act as liquidators on these pools for additional revenue. Although I think that is best done with flash loans, from what I’ve been reading at least.
If we are able (although not sure) we can pay out from the yield reserve of the isolated pool into the main anchor protocol kind of like a fee for the service. Say when it’s increasing at a rate of 1% a day we pay out 0.1%
For projects seeking liquidity we can deploy their token onto an isolated pool.
I’m not sure how popular this would be it would depend on the tokens and projects that get listed.
As for the difficulty of this system I’m not entirely sure how hard it would be to fork, change parameters, and remove features without breaking anything but I mean if those scammers are able to pull anchors whole front end and build a scam behind it it can’t be that hard for a few of us community members to get together and bang our heads for a bit.
Well, forking Anchor to create a wild west lending might have some merits not sure that is the way to go.
In my mind, lending isolation as seen in v3 Aave is more about stopping contagion risk. However, Anchor only lends out UST so there is really less protection and cost-benefit here in my mind. Forking is extreme and would take a lot of time and resources, audits, etc. The more realistic way in my mind would be to allocate UST to another contract that then lends out to more risky tokens. However, it’s still really the same pool of funds just in a different contract. I can see how if this pool had a liquidation spiral, it might help ward that off from spreading into the other parts of the protocol but not sure it would do anything for stopping a bank run on the event, which is the real risk.
In my mind the cost-benefit of spending time ensuring only safe assets are added, setting low LTV to start, and scaling from there is probably the best course of action. Further, there is still a lot of great liquid layer 1 cross-chain lending to go after. Our resources spent going after this for now into the foreseeable future is probably the best cost benefit.
I can agree with that, I think there’s load’s of low hanging fruit for cross-chain to grab. By bank run you mean if the pool went insolvent / liquidated people will pull directly out of Anchor earn correct?
I wouldn’t really bother with just allocation of resources to a new contract at that point there is no point in isolation because like you said Anchor only lends out UST so it’s like we’re an isolated basket and it would be too much risk / little interest to throw collaterals with less liquidity onto anchor I’ve seen some of these pools sit with at risk collateral for a period of time before a liquidator comes to clear it.
Basically, not in Anchor’s best use case but could be something another protocol might be interested in. (like edge / mars etc). Which is fine in itself.