This is a proposal concept to blacklist earn deposits from parasitic MIM activity. This is a nuclear option for limiting the manipulation of Anchor until better safeguards can be put in place on the system.
Secondarily, we could institute a max deposit based on % of the total deposits. Anchor could also increase this threshold for individual wallets based on borrow activity such that the more that you borrow, the higher your deposit limit. The goal would be to encourage protocols who are spamming Anchor to become “better citizens”
Example: Protocols want to participate in Anchor, say MIM. If their deposits exceed 2% of TOTAL deposit base, then the excess would just NOT earn.
Option 2 is interesting.
The challenge is whales will be able to create multiple accounts to circumvent it.
But smart contracts wouldn’t be able to (as easily, but still doable)
You would also need a whitelist function for lp’s for the ones loop is building where one side is aUST (like bLUNA/aUST or Luna/aUST)
This one seems a bit excessive at this stage.
I like the idea if it’s easy enough to implement.
Also, how about a simple maximum deposit size of of $1M per account into EARN? That alone should reduce batch funneling, increase costs and make it an administrative headache.
It might be a slight inconvenience to legitimate users (who have over $1M invested) but they can consider it a nice problem to have for the 19.5% return.
I run a custodial savings app on top of Anchor. A $1m cap on wallets would add fairly annoying complexity even though the use case is as intended (allowing thousands of consumers who want a managed service without the need to self-custody to benefit from the yield).
I’d support option 2 though (cap at 1-2 % of total deposits per wallet).
Wallet specific restrictions is tantamount to censorship, which is the opposite of what we want for UST. It’s supposed to be the most open and censorship resistant. Other options should be explored that make the system sustainable rather than trying shut out certain actors.
As @PFC states, it’s not hard for whales and smart contract protocols to then break the amounts up into smaller wallets.
Well the good news is it appears Abracadabra are not planning another batch at this moment. It seems from this post they are waiting for you guys to deploy the cross chain solution, perhaps to improve the borrowing imbalance?
Sorry to disappoint but that’s a gross misunderstanding of the tweet, Abracadabra is planning to take the UST strat to a new chain (Fantom), that’s what the question was about and they need EthAnchor (which is a real thing that exists today on Eth) to be deployed on Fantom.
Well the team better fix up those borrowing options fast then.
@Hank-O and I were discussing a similar idea yesterday. Limiting how aUST can be used by other smart contracts. Governance would have to maintain a whitelist but I could see a future where this is actually quite bullish for ANC token holders, if Anchor had a similar bribing mechanism to Curve, where projects can compete for the ability to use more and more aUST. This isn’t a well thought out idea but there is room for some innovation here.
@DEERKING - this idea seems to have some merit.
Despite our desire to have as many deposits on Anchor, it is important to limit the exposure to certain protocols and maintain diversification.
To keep to the tune of decentralization, I too opt for Option 2. It seems to be a healthy balance of attracting new deposits yet controlling exposures.
On the topic of Curve, here is their own risk assessment of the Abracadabra degenbox.
This detailed analysis confirms what we’ve been warning about for weeks. The degenbox is destroying the yield and a presents a systemic risk.
Why don’t we blacklist all deposits for the time being until our yield reserve is stable again?
Let’s see risk harbour’s insurance. They have a limit. Why can’t Anchor? This is the key protocol in Terra. Without Anchor, Terra is not attractive at all.
I am also open to reducing the earn yield rate to save our protocol. The degens doesn’t care if Anchor dies.
Can we disable ETHAnchor deposits as a starter? I assume we at least have full control over this?
As UST slowly drains out of the Degenbox (as we’ve recently seen) then let’s stop it being rotated back in.
I suspect Abracadbra are working with TFL as a partnership, but if this is indeed a “Viking Attack” as suggested by Curve’s risk analyst then we can put a swift end to it.