A week has passed since my last update on @anchor_protocol and the yield reserve on @YouTube 🎥
Since then, a lot has happened around @terra_money and $UST.
So, how has the situation evolved around Anchor? A lot of good news & also some WIP to move ahead.
👇🧵 \n
Since then, a lot has happened around @terra_money and $UST.
So, how has the situation evolved around Anchor? A lot of good news & also some WIP to move ahead.
👇🧵 \n
1\ First, let us tackle the elephant in the room: Degenbox and $UST peg.
The $UST peg has shown tremendous strength while over a 1.2b $UST left Anchor EARN.
This amount seems to be partly covered by the Degenbox looping strategy with $MIM on Ethereum.
etherscan.io
The $UST peg has shown tremendous strength while over a 1.2b $UST left Anchor EARN.
This amount seems to be partly covered by the Degenbox looping strategy with $MIM on Ethereum.
etherscan.io
2\ Currently, the Degenbox is holding 100M $UST. As per Medium article by @mim_spell, the Degenbox shall keep around 10% of $UST on the Ethereum chain.
That number decreased by 43M in last week, which indicates that around 0.5B $UST has been withdrawn from EARN (more possible)
That number decreased by 43M in last week, which indicates that around 0.5B $UST has been withdrawn from EARN (more possible)
3\ Ultimately, the news of the unwinding is exceptionally favorable for the @terra_money ecosystem.
The pressure on the EARN side decreased by around 30%, but the $UST MC did not drop, which shows the strength and demand for $UST in general.
The pressure on the EARN side decreased by around 30%, but the $UST MC did not drop, which shows the strength and demand for $UST in general.
4\ Nevertheless, the reserve dropped to $30M. While the absolute number is down, the reserve's runway stayed almost unchanged in days.
This is due to the extreme decrease on EARN & the positive effect of $LUNA staking yield, which increases due to the ecosystem's true revenue.
This is due to the extreme decrease on EARN & the positive effect of $LUNA staking yield, which increases due to the ecosystem's true revenue.
5\ Based on today's figures, the yield reserve would hold for another 20 days.
After that, @anchorprotocol would run roughly at a 9% yield to the income of $432M to almost $5B on EARN.
After that, @anchorprotocol would run roughly at a 9% yield to the income of $432M to almost $5B on EARN.
6\ So, what to do next?
The @anchorprotocol team is working with high speed integrating the new borrow model V2, which would include cross-chain yield-bearing auto compounding assets like LUNAx & mSOL into the borrowing side.
The @anchorprotocol team is working with high speed integrating the new borrow model V2, which would include cross-chain yield-bearing auto compounding assets like LUNAx & mSOL into the borrowing side.
7\ Additionally, it seems that the liquidation threshold for bAssets will be increased via governance poll to 80%.
Most likely, this will go hand in hand with a rise in the max borrow threshold to around 65%. The max borrow rate cannot be adjusted via a vote.
Most likely, this will go hand in hand with a rise in the max borrow threshold to around 65%. The max borrow rate cannot be adjusted via a vote.
8\ So, how would the situation with the added changes plus a potential top-up of the reserve as teased by Do Kwon? This is the current result with the current assumption:
Adding $500M in new bAssets (AVAX), increasing the true borrowing ratio to 55% & a $LUNA recovery to $67
Adding $500M in new bAssets (AVAX), increasing the true borrowing ratio to 55% & a $LUNA recovery to $67
9/ The numbers indicate, that both new bAssets and an increase in TVL might be the needed turnaround for
@anchor_protocol
The runway adding between 100-300M $UST would support Anchor for multiple months.
@anchor_protocol
The runway adding between 100-300M $UST would support Anchor for multiple months.
10\ Wanna do some math by yourself? Be my guest. You can find the current version of the Excel-Tool online.
I will improve the tool in the next weeks and add some automated data sources with the support of the data master @alphaDefi_
docs.google.com
I will improve the tool in the next weeks and add some automated data sources with the support of the data master @alphaDefi_
docs.google.com
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