Users come to Anchor for two reasons: Earn and Borrow
If locking ANC has no impact on either use case then why would anyone care to accumulate/lock ANC? You can’t just create “utility” for the sake of utility. It has to be utility people actually want.
Examples of how veANC could create utility people actually want:
Earners - The more ANC you lock as a percentage of your Earn deposit, the more ANC emissions you receive.
Borrowers - The more ANC you lock the higher the Distribution APR thus the lower the Net APR to borrow.
What does “power” mean? Independent distribution weights? If so then now we’re talking! But “power” is vague.
Even if this proposal is passed, there still seems to be no reason for people to hold an anc token.
Hope the vote, which begins at the end of this week, include the ‘reason’ to hold or lock anc token.
I think this proposal is a good step in the right direction for a few reasons. It doesn’t address every concern immediately, but it does set the foundation for a systematic way to eventually influence a lot of these concerns if the community decides to do so. It also should hopefully encourage voting and community engagement. Anchor is used by many different types of community members who each have their own objectives - earners, borrowers, ANC holders, different protocols, etc. Over time, this model can be used in a variety of ways to provide value to each type of user.
Want a higher earn rate? Lock your ANC. Want a lower borrow rate? Lock your ANC. Want to somehow be treated differently than the average user? Lock your ANC.
I’m not suggesting any of those ideas are good - just trying to show examples of how veANC can make a lot of future Anchor improvements easier to implement and provide utility for ANC at the same time. So while this proposal may not have immediate utility to some members of the community, I do think it at least provides a better way to provide future value for all types of members.
I agree with this, as it stands ANC is far too liquid without much purpose other than leveraging. I can get competetive rates depositing on edge vs governance and gain access to borrowing UST. As it stands though we’ve cleaned up the faucets and it’s currently reflecting in ANC price. This serves to advance the strategy by adding a sink that will reduce circ. supply.
@intrepid_user My proposal is flexible and able to be implemented ontop of ve Tokenomics so we can leave it on the back burner for now until after v2/2.1/x is executed.
Reasons for ordinary token holders to lock is that users get 50% of the staking rewards when there is a poll live and they vote. This incentivizes voting, which the protocol struggles with right now.
This is about driving maximum utility behind the Anchor token. LSD creators have the biggest incentive to buy and hold tokens now because it is a direct link to unlocking millions in revenue. This is a pretty compelling reason that drives Anchor utility probably more than anything else.
Power might not have been the best word. Gauge boost might be a better word. The more veANC you have, the more LSD providers can push the gauge in their favor, increasing the ratio that is swapped into their LSD.
if you hold veANC and borrow against bLUNA (or any other collat type offered on Anchor), you can vote to increase the amount of ANC emissions when borrowing (making it more “powerful” by lowering the cost to borrow)
example: stader labs wants to attract more users to borrow against LUNAx therefore I buy up a bunch of ANC, vote lock that shit, then try and route more anc emissions to users who borrow against LUNAx
This is my current understanding and it might be flawed so take with a grain of salt
Is the initial gauge boost function meaningful only when borrow model v2.1 is applied?
If you entrust LUNA, do you mean that it will be exchanged for liquid staking assets that are exchanged inside the anchor? And when you adjust the ratio, do you mean to adjust the gauge with veANC?
If number 2 is correct, what are the benefits of LSD providers allocating more of their LSDs? Is it trading volume?
So, just to make sure I understand correctly, beyond the voting power, the fundamental value of veANC is that it entitle lockers to 50% of all the staking rewards generated by the assets deposited in the protocol. However, to be eligible to you share of those staking rewards, you need to vote every time there is a governance poll. Did I get that right?
What if there is a period with no poll - do veANC lockers that voted on the latest poll still receive 50% of the staking rewards?
Want to give a quick update because it’s not a straight forward integration:
Once live all new ANC stakes will only be able to stake through veANC locking. All previous ANC stakers will keep getting rearwards but have no voting power until they unstake whereby they will only get rewards and voting power if they veANC lock. Going forward this will be the only way to lock your tokens going forward and get rewards.
So eventually this will move to a model where all staking rewards and voting power will be based on veANC and voting.
Correct the gauges are determined by veANC voters. This will determine how much Luna will be swapped for each LSD on the backend by Anchor protocol. So for example if the Luna gauges are 60/40 stader/ lido the idea is that anchor will swap the Luna 60 40 for Lunax and stluna respectively.
It should go live right after the vote executes. It will be more meaningful when the v2.1 baskets are live.
No, it goes back to the standard reward mechanism that eventually will migrate 100% to being based on veANC. However since you can’t force people to unlock from their current staffing m staking there will still be carry over from original ANC stakers that don’t unstake into the veANC model who still will receive rewards as well.