Certificate of Deposit platform - Locking up UST for X years

Hi guys,

I suppose this idea was inspired by HEX.

The basic idea is that someone will deposit their UST into the platform for a fixed number of years in return for a guaranteed 20% compounded interest rate. Here are the returns depending on the number of years staked:

5 years = $2,488
10 years = $6,191
15 years = $15,407
20 years = $38,337
25 years = $95,396

As you can see, the returns on a relatively small stake become truly phenomenal at longer time periods. The obvious problem here is that the interest rate from staking rewards from bETH, bSOL, bLUNA etc will decrease over the years meaning that the 20% is going to decrease. So how could we guarantee the 20% rate?

There are a number of ways I see the protocol paying for future payouts.

The first obvious one is: FUTURE DEPOSITS. Essentially todays debt’s will always be guaranteed by future deposits. However this is where the similarities to a pyramid scheme come into play (something we don’t want to do obviously).

However I still think there is an opportunity to turn the idea into a sustainable system.
HOW?

Perhaps some sort of predicitive moving average that calculates incoming future deposits. This can then be divided by the future outgoing payouts. If deposits are predicted to cover the outgoing deposits then the protocol should be stable. If not then the shortfall could be covered by some form of penalty for ending a stake early. This penalty will be dynamic (calculated using the predictive moving average idea mentioned above).

Next, deposited capital can also be invested in strategies that yield higher returns (perhaps delta neutral strategies).

Importantly, we must also remember that government induced inflation meaning that $1000 deposited in the protocol 25 years from now is going to be worth much less than today. How much less? No one really knows.

Anyway, that is basically all. What are your thoughts?