Capitalising Anchor's Reserve with $450m

Yield reserve top-up has to be independent of the mechanics in Anchor. Using your suggestion, if there were to be a big drawdown on LUNA’s price, collat that is backing that “yield reserve loan” is in danger of being liquidated. New money would need to re-collateralise that loan (defeating the purpose of this suggestion in the first place) or repay the loan (which is depleting the yield reserve in itself). Don’t think this will work.

Why don’t we have wrapped stables like USDC, DAI or BUSD on the Terra chain?

Users can then bridge in / out directly via Terra Bridge. Anchor can effectively own all the liquidity for those LP pools, perhaps in Astroport (UST-USDC, UST-DAI, UST-BUSD).

All fees collected can be redirected back to the yield reserve. This would also be a better UX than using expensive 3rd party DEX’s on other chains.

The option mentioned here is to just inject $450M worth of UST into the reserve, which is admittedly independent of Anchor dynamics, but if $450M worth of bLUNA borrow isn’t going to help solve the revenue problem in the short term, then I’m worried about just how unsustainable the current source of borrow is for Anchor. As in, I’m missing what the eventual state is where Anchor becomes self sustaining. Or is 20% really just a marketing play in which case I’ve always felt that 15% is very reasonable and 20% unnecessary even for marketing purposes.

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Have you guys seen this?
4 borrowers is 50% of the 3.3B luna collateral on ANC. The most strange thing is that some of these wallets have massive borrow and the UST is just sitting on their wallets, almost like if they were just subsiding Anchor.

I wonder if this is TLF or @dokwon holdings.

If this is the case, it means ANC less viable than we believe.

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Is it possible to have the yield reserve in Anchor earn while still acting as the yield reserve. This could help fight depletion and super charge times when yield reserve is building. Not sure how the code works, but doesn’t the reserve pay out every hour? Can the money just come out of the Anchor earn for the Anchor reserve? I hope I’m making sense here.

Hi, my post from yesterday got caught in spam. Can an admin review and release please. Thanks

akismet-has-temporarily-hidden-your-post/4279

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So 450m ust dca in anc in eli5 seem pretty fine

related a bit off topic , but I need to raise the flag pole
@dokwon, @moderators , would you mind please to don’t forget us in mirror protocol,
it not the cash we need, but active devs mgmt on colleteral allocations and market anticipation
We are front running the global market in mirror
thank you , bye bye

Got it. Thanks for the response.

Lunatic

Good work putting this analysis together. I like the overall approach to modelling - could not find any significant flaws in it. Supportive of the idea overall and similarly hopeful that v2 will enable faster onboarding of new collateral types and tokens (sAVAX, SOL, ATOM, LP tokens, etc.).

A couple of questions related to assumed modelling parameters:

  1. UST grew at 5.2% CWGR historically, yet the model assumes only 3.5% CWGR - what would be the rationale of that? Does that come from removing the “noise” of burning the community pool? I have not seen this explained explicitly and “ignore the community pool burn to better account for organic growth” is the simplest explanation that I could come up with (Occam’s Razor).

  2. Similarly, the model assumes a different CWGR for bLUNA/bETH than that which has historically been observed (3.6% / 3.5% modelled vs 5.3% / 4.4% historically, respectively for bLUNA/bETH). Could you please explain why?
    Is it to make the final result more conservative?
    A follow-up question: is it a coincidence that UST CWGR modelled is just below that of collateral CWGR?

Understanding the above would help me (and others too, perhaps) assess the viability of the results you have arrived at.

Thanks! :slight_smile:

Seems like that reserve will be running out by 1-2weeks. In short term, we should capitalising it. However, the dev team in Anchor should really consider speed up their work in adding new collateral and the cross chain version of anchor. The community cant help that much. Anchor protocol must built up their own sustainable model before the real bear market comes.

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The LFG.org board has approved the resolution to capitalize the Anchor yield reserve by 450M UST.

To do this, LFG will:

  • Withdraw 9.5M Luna on Feb 11th 12pm SGT
  • Swap 9.5M Luna to UST over the course of 5-10 days, which should result in ~450M UST being minted
  • Send the resultant UST to the Anchor yield reserve contract when the swaps have been completed
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Hi @dokwon, my comment from yesterday is stuck in the spam filter. Can someone please review and release it?

Thanks :slight_smile:

No need of on-chain voting?

Could Anchor propose “leveled” interest rates (ie. to discourage whales from draining it all at once)?

Say 19.5% for the 1st $10k then 15% till $100k & 10% thereafter?

This would allow:

  • Genuine small retail investors to achieve some gains.
  • Force the opening of additional wallets for investors looking to deposit more than $10k.
  • Discourage whales, by forcing them to open 100 or more wallets (until s/one figures a way to automate this process, that is, but even if this gets automated, another solution could be to get humans to “prove they’re humans” while opening a wallet).

More wallets good?

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This is a very important point as just one person alone can currently take out the whole reserve in one month if they deposited $20B.

Since these people could easily automate wallet-creation (unlike most retail investors), I’d find it a better solution if the interest depended on how much ANC the person has. For example 10% interest if 0% ANC to 20% interest if 10% ANC. This would also solve the yield reserve problem for good.

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Would this massive burn, means higher fees / staking rewards? that would also help ANC with their Bluna collateral.

I like your idea because it would stimulate growth of the ANC token.

However, if You had 20B, its likely you also had extra 2B as “spare change”.

Managing 2,000,000 wallets would be more complex than simply owning 2B in ANC.

Great question. Been wondering about the diff between LFG <> TFL for some time now…

Well, yes, but can’t do that every time that this occurs, can we ? So, make it more elastic ? Also, if the proposal to borrow 80 % LTV on Anchor has passed, we should see more collateral there. Before at 45 % it didn’t make any sense, since Binance offered 60 % LTV and 7 % interest on 6 months.