It’s still a risk… it another piece in the puzzle that can go wrong, he’s not saying that Wormhole is flawed, but rather that it could be.
Agree here. No perfect system, just a better one. At least MAP is using an entire chain to safeguard the transfer, not the MPC mode (which in nature, people, to manage the transfer).
Will support the proposal
Definitely a good idea. But isn’t it 320 million were just stolen by hackers through wormhole? Security is a serious issue in the crypto world. Need to figure choose a more secure bridge to improve this, then the proposal will be good to go!
Wormhole not only made users whole, so no actual impact, it was on the ETH contract only afaik and now that they are aware of the flaw they have fixed it, so it’s one less possible flaw. Any bridge is risky, at least this one has a good track record of supporting the users when it all goes wrong.
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Hi @bitn8 , (cc. @ryanology045 & @ mcantieri )
Proposal looks good and I think the community is in majority in favor of adding sAvax to Anchor but I was wondering:
Why are assets like bATOM or bOSMO not being prioritized to be onboarded as collateral when it seems like they would be easier to be onboarded due to IBC composability and therefore probably represent much less smart contract. Furthermore, many of the current validators being used for bLUNA are also active validators of ATOM or OSMO, meaning reduced counterparty risk.
What is the current process/roadmap for collateral onboarding?
There was talks of bSOL a while ago but I have not followed if it was still planned in the short term?
Thanks
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Yes, .finally.
- If liquidity continues to grow as quickly as it has, an increase to 80% LTV in the next few months is possible.
I wanna, by feels, just start out with 80% LTV.
… but…foot in the door. I’ll wager it’ll be a quick wait to raise the LTV threshold barring something major/prolonged event,.and the cushion time is wise I suppose. anyway so yes, let’s start this.
Think the cosmos and IBC assets mainly awaiting Anchor V2 to be rolled out and another update soon after to enable direct governance votes with provided code changes to toggle collaterall IBC assets and their params. IE: functionality where the code ypdates according to the vote, as outlined in the proposal, rather than wait and rely on some team member to implement after. Same as how many Terra Luna code proposals do. Someone correct me if I’m wrong please. In otherwords i the qorks and dtreamlined to be easily implememted via.proposal and vote.
Excellent! I fully support the coming of moar and moar bcollaterals as Terra grows.
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I think this is an excellent idea! Let’s get this into the pipeline.
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this is great news!
2 comments:
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i notice the oracle feeder is a different wallet from the bAsset oracle wallet; just want to confirm that this is intended
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sAVAX doesn’t seem to follow the bAsset pattern; can we get some background on how anchor will get the sAVAX rewards when locked as collateral?
edit more specifically, please describe what sAVAX’s custody’s distribute_rewards() execute message does. i’m not able to find docs or contract code to read for myself.
thanks.
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Great news! More collateral could never goes wrong, if it meets the security standards.
From what I understand sAVAX accrue values by autocompound into the value of the token, so will have to wait for borrowing V2?
If that the case, also wondering if whitelisting will have to wait for V2, or it could be done beforehand?
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Yes, please. Adding sAVAX collateral support would be great!
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sAVAX is actually being added without a taking a staking percent. The contracts would have to changed to do that and it would have to have it’s own interest rate, which it won’t. This model is more competitive to the new market space where liquid staking derivatives can be added to any saving and lending protocol very easily. Eventually, bLUNA, which is old and dated will be placed with stLUNA and lunaX. The theory is that borrowing against a LSD will demand a higher borrow rate because of higher utility. You could theorize that it would be something close to the base market borrow rate on the asset plus the staking rate.
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When bANC, bSol, bAtom ? @bitn8
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Wanted to share a few thoughts from the Risk Harbor research team on this.
sAVAX as collateral would not only increase TVL and slow the depletion of the yield reserve on Anchor, but it would also make the protocol more robust to shocks by diversifying the protocol’s assets.
The addition is not without risks, risks that we actively analyze and account for. We argue, based on the risks outlined in the proposal, that the benefits far outweigh the risks.
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Smart Contract/Technical Risks: Usually, smart contract risks are minimal for integrations into existing protocols and for simple primitives like liquid staking. The Benqi code has also been audited, and its results are publicly available.
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Liquidity Risk: it is important that the underlying asset (sAVAX) has a great deal of liquidity so that liquidations from Anchor do not move the price of sAVAX too much, causing further liquidations in what’s known as a deflationary spiral. As the proposal mentions, there is currently 150M of liquidity on the sAVAX/AVAX pair on Trader Joe. Combining this with all of the liquidity available across AVAX/XYZ pairs on Avalanche DEXs, liquidity risk appears to not be a problem.
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Bridge Risk: The bridge (wormhole in this case) is what keeps the version of sAVAX on Terra, wasAVAX, in 1:1 correspondence with sAVAX on Avalanche. If the bridge is compromised, this ratio may slip. Such a slip would cause Anchor to misprice the value of assets it actually holds, wasAVAX, relative to the true price of native sAVAX. This may cause protocol insolvency in the short term.
The great news here is that well-financed wormhole backers demonstrated their readiness and agility to cover the losses resulting from a bridge compromise event in the past. Everyone can rest assured that, even if the bridge is compromised, the funds will be safe in the medium and long term.
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Ideally in about 1-2 weeks! Almost there- AMA to come in two weeks diving into it!
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@bitn8 would you mind responding to this?
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@bitn8 wow, so after onboarding sAVAX, going to board the next bAsset imediately?
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