[Proposal] Harpoon Protocol: An Elegant UI for Community Liquidations

HARPOON PROTOCOL

Development - Community Fund Spend

Poll is now live: Anchor

The Harpoon Protocol team would like to highlight that we are applying for this grant retrospectively. Our platform is designed, built and ready to deploy at a moment’s notice. This project has thus far been completely self-funded by the people involved.

What is Harpoon Protocol?

Harpoon is an elegant and efficient solution allowing the every-day Terra user to bid on under-collateralized loans on Anchor and execute liquidations on their collateral.

Why?

A common and popular topic in the community is the absence of a tool allowing users to easily participate in Anchor’s liquidations market. Harpoon Protocol was built with the “non-technical” person in mind - we embrace TFL’s motto: “Look outwards”.

Liquidations are currently limited to people familiar with coding who manually input liquidation bids and interact with Anchor’s Liquidation Contract directly. The obvious downside is that this encourages centralization; a small minority interact with the contract.

Harpoon offers a user-friendly, smart contract-backed (more on this below) UI platform that allows for seamless bidding on bLUNA collateral at risk of liquidation on Anchor.

Benefit And Impact Towards Anchor Protocol And Anchor Community

Anyone with a Terra wallet can use Harpoon’s interface. It is extremely intuitive and easy to use. This is something the community has repeatedly asked for and we are proud to provide them with this platform, opening up Anchor’s liquidation market to all.

How It Works

Using Harpoon’s friendly UI, users participate in Anchor’s Liquidation Contract. It works as follows:

  1. The user connects their terra wallet via the Terra Station Chrome Extension.
  2. The user submits a UST bid to Anchor’s Liquidation Contract and chooses a bid’s premium/discount rate (up to 30%). This bid is essentially a deposit into the liquidation contract. It is not tied to any specific loan/borrower address and, due to Anchor’s contract architecture, the user can only have one bid in place at any given time (the bid can be retracted at will).
  3. Once a loan is up for liquidation (it has exceeded Anchor’s safe ratio of 50% LTV), the user can attempt to “Liquidate” that loan, using their bid amount to pay off that borrower’s debt and win a portion of their collateral (or all of it!) with a premium/discount.

Status Of The Project

Both the front-end and the back-end for V1 are developed and are currently awaiting release!

*Captured Directly From Site

Team Profile And Likeliness To Deliver By The Described Deadline

Our team is a small group deeply invested in the Terra ecosystem. We have infrastructure, development, BA, and technical & marketing skills and resources in abundance.

As a further commitment to the Terra Ecosystem, we are currently building a potential Validator Node and aim to have it up and running in April/May.

We are fully prepared to immediately roll out our project, including marketing and community engagement.

Potential Of The Proposal

We are currently not aware of any competing product and believe we are the first to market. The platform will be open to a global audience and will be accessible 24/7/365.

With longevity in mind, we are looking to build a smart contract which will benefit the Terra ecosystem as we progress, and provide reward incentives for the LUNA stakers on the network.

Breakdown Of Costs

• Company formation costs.

• Enterprise grade AWS hosting…

• Ongoing development/support costs, including:

  • Development and deployment of a state-of-the-art indexer to match Anchor’s Money Market and Overseer contracts.
  • Development of a slick, easy-to-use UI that interacts with Anchor’s contracts, built on modern technologies ReactJS
  • Dark mode :wink:
  • IP restrictions & better security
  • V2 - updated indexer potentially looking at web sockets + new infrastructure
  • V2 - updated UI with detailed analytics screens
  • V2 - tracking of bids

• Domain name registration and hosting.

• Trademark registration.

• Research and development time invested by the team - see itemized budgeting for the project below.

Detailed R&D Cost Breakdown

  • (1 ANC = 5 USD at time of writing)
Category Estimated Hours Cost
Research 80 1600 ANC
UI Prototyping 60 1200 ANC
Brand Design 24 480 ANC
V1 Backend & Indexer Dev 250 5000 ANC
V1 User Interface 180 3600 ANC
V2 Indexer 214 4280 ANC
V2 UI with Analytics Etc 160 3200 ANC
Various Deployments 24 480 ANC
QA / Bug fixing 24 480 ANC
Buffers / Misc 24 480 ANC
TOTAL 20,800 ANC

Price

We have summarized all of the costs punctuated above to the fair estimate of 1040 hours, at a standard rate of $100/h + maintenance / infrastructure costs of 1200 ANC

Total ANC requested = 22,000 ANC * capped at value of 110000 USD

Milestones / Vesting

Given that V1 is fully operation and ready to go, we propose the following basic vesting structure:

Milestone Released Amount
Grant Release + V1 Launch 55% (12100 ANC)
V2 Release 45% (9900 ANC)

Feasibility

As highlighted above, Harpoon aims to bring a platform to the Terra Ecosystem that compliments Anchor in several ways whilst adding value to the community. There are many members of the community looking for a solution providing direct interaction with Anchor’s Liquidation Contract.

Far beyond an MVP and concept, we have a fully functioning protocol ready to deploy and a fully stacked team waiting to implement.

Dependencies

Harpoon Protocol is a platform in its own right and has no dependencies on anything other than Anchor’s Liquidation Contract. We are unaware of any interference with any projects.

Slack - We are well positioned with the size of our team to handle an immediate increase of use on the platform. Should we need to onboard more people in the future to stave off any potential scope creep, we will do so.

Feedback

Our Twitter account has gained over 1000 followers with purely organic reach. We anticipate this number to rapidly increase with paid promotion.

We have been featured on Terra Bites and various other vlogs & podcasts.
Several Telegram channels have expressed keen interest in what we are doing, and our own Telegram has amassed over 250 members through word of mouth alone.

Promotion

As users interact with the platform we expect requests for more advanced features. Our platform design is extremely agile. Discussions for a Smart Contract within our team are ongoing. We would not be without the input and support of the Terra community and will include them through rewards and incentives as we build our brand and platform.

Resourcing

We are currently engaged with the Anchor/Terraform Labs team and will continue to do so.

Maintenance

We are in the fortunate position of counting team members with many years of relevant experience in supporting all aspects of Harpoon, from infrastructure and logistics to marketing and design.

Skills

We have a very varied skill set amongst us and are very lucky to have the team at Lab19 to help development both Front-End and Back-End code.

Future Prospects & Development

Harpoon V1 + V2 are the first of our endeavours. We will continue to deliver valuable services to the Terra community. Items on our roadmap are:

  • Harpoon Protocol V3: Liquidation pools; On-chain liquidations.
  • Validator Node.

We are immensely grateful in advance for your support and votes, and are very much looking forward to reading your comments and interacting with the Terra/Anchor community.

We’re committed, prepared and fully ready to give users a fair chance at harpooning some whales.

Stay Tuned to our Twitter and Telegram for updates and tutorials!

In regards to our code: Each iteration of Harpoon Protocol will be released under the MIT open source license within 30 days of version release.

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Twitter: https://twitter.com/HarpoonProtocol

Telegram: Telegram: Contact @harpoon_protocol

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Congrats Harpoon,

I believe that this is a valuable new addition to the Anchor ecosystem.

The main question I have is that would the source code be open sourced/uploaded on github if the projected is funded by the community? Especially since the grant size involved here is sizeable.

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Thank You! Yes as per our dev team, we plan to make our github/code open source during each iteration. Within 30 days of each version release.

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Thoroughly love the idea.

Questions:

  • Who is the Harpoon team?
  • What’s the ETA on delivery?
  • What are the V2 features?
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I have a few more questions that is data related that I think might be useful for the community to evaluate the proposal also:

  1. How many borrower positions out there, and typically how many are close to liquidation?
  2. Currently when a loan is able to be liquidated, how quickly do bots do it? I’m wondering whether humans have “time” to even compete against liquidator bots which have the advantage of speed

Thanks again!

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  1. Our Front-End is handled by the folks at Lab19 (https://lab19.dev/). Back-end as of right now wants to remain anonymous but may reveal later on as we go.

  2. No hard date yet set, but in the coming week/weeks.

  3. Please check the proposal, but its an upgraded front-end UI, added analytics that cue borrower behaviors (how much liquid ust they have etc), and an updated indexer to make things more efficient and fast.

  1. Right now we 7000 loans indexed, 90 positions $1 away from liquidation.

  2. Bots do liquidate fast, but it is possible to liquidate a loan position before a bot. During major moves down in price, bots sometimes simply lack the capital to liquidate all positions no matter how fast they move and we have seen insolvent loans stay unliquidated as long as 5 mins. Our major focus after quickly iterating a V2 of our product is to move liquidations on chain, where a user can simply deposit a bid to our smart contract and have the contract execute a liquidation as the price changes on chain. There are some challenges to moving liquidation on chain but we are currently in the midst of solving those challenges,

Just to confirm, there’s no plans for your own token?

As someone mentioned, the grant size is quite sizeable. Especially for V1, which from my understanding is an UI to interact with anchor smart contract. There’s no “protocol” yet.
I’m ok with bigger grants when there is no new token.

Once you build out your own smart contracts, will the protocol charge fees? How do you intend to keep paying for the infrastructure and ensure the uptime after the grant? It seems like this is building up to be an important part of Anchor, if with high demand the website would be down, there could be a significant impact on liquidations.

Also I think it’s kind of a bad time for a proposal now, the price of Luna is very volatile, ANC is my last resort to pay off some of the loan to avoid liquidation, no way I’m locking it now. So people need to remember to vote on the last day of the proposal.

The webapp value is incorrect, for some reason the Anchor UI displays the value in uANC, we’re asking for 22,000 ANC or around $110k.

I’d say its comparable to SmartStake’s grant proposal (10,000 MIR), even though their’s is a dashboard.

Our proposal is to build everything out aside from V1 (already finished).

This is really cool; I am a CS student, and I like that Harpoon’s mission is to democratize liquidations. I am also very interested in building my own fleet of liquidation bots!

I look forward to reviewing the Harpoon source code.

Fingers crossed for the proposal to go through.

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@HarpoonProtocol The forum really is the first place to get public support before posting a live poll but it does seem to have passed quorum. That said, there are still a lot of questions to be asked here, such as price tag justification that further cost benefit analysis would be nice to see, i.e. How will this protocol theoretically save more than 100k USD in the coming year in added value to users? Also what is the future estimated yearly that you will take to the poll each year to maintain?

It seems like a great concept! I would also like to know why this initiative is more important than say fine-tuning the Bot liquidation with algorithm that has similar balanced parameters similar to what you are proposing?

Thanks,

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This is the 3rd time price tag has come up and I’m really confused as to why compared to other community grants that have been given in the Luna ecosystem.

Lets take the smartstake dashboard that was funded for 100k. From the looks of it, Mirror community funded a validator to take existing data and put it into a nice react framework.

https://terra.smartstake.io/
https://terra.mirror.finance/gov/poll/62

From what I have asked the devs on TG, they have already analyzed and indexed every loan position on anchor, and plan on giving detailed analytics about loan positions. Seems to me that by itself is a comparable product to what smartstake produced. I have my doubts about the v1 UI being able to beat out bots but I’m not sure I understand the constant harping about price tag in comparison.

@skrew

Thanks for your response here. I agree the price tag doesn’t seem too out of line but the problem is this didn’t follow standard protocol by posting here first with the loan analytics breakdown. That really should be posted here first and then if the community says okay take it to the poll.

Hopefully we see the that data soon. Once I do, I’ll review and then vote

I would like this answered:

Once you build out your own smart contracts, will the protocol charge fees? How do you intend to keep paying for the infrastructure and ensure the uptime after the grant? It seems like this is building up to be an important part of Anchor, if with high demand the website would be down, there could be a significant impact on liquidations.

@Ernestas

Yes, i would say that if the smart contract based liquidation is successfully implemented, some sort of fee will be implemented based on successful liquidations.

We are still working out the exact mechanics of how that will work. The fee will be used for upkeep and team funds.

Looks like an interesting feature. But given that collateral are to be liquidated automatically upon the 50% mark, this tool is completely based on the presumption that bots do not work in all the cases. Doesn’t feel like a strong use case for me.

Why not look at introducing some form of bidding by interested parties when the collateral is within a threshold closer to the 50% liquidation limit and once there’s a commitment by a party to take over the loan/collateral, remove it from the queue for liquidation?

Just a thought.

@rblncblr

As per the Anchor Smart Contract, loans aren’t able to be liquidated until they are at above 50% LTV. There is no way possible as of now to pre-liquidate risky loans.

Sorry, I don’t think I suggested pre-liquidation. Let me explain better with a picture or a specific example.

Another question here:

Bullet 3 under “How it works” section says as below:

“3. Once a loan is up for liquidation (it has exceeded Anchor’s safe ratio of 50% LTV), the user can attempt to “Liquidate” that loan, using their bid amount to pay off that borrower’s debt and win a portion of their collateral (or all of it!) with a premium/discount.”

Under what circumstance, will they win all of the collateral? That is, if the collateral value further falls to almost the value of the debt? A catastrophic sell off? Or am I missing something?