Enable Wanchain bridged assets as isolated collateral on Liqwid protocol to borrow other Wanchain bridged assets.
Launch markets for Wanchain bridged BTC, ETH, WAN.
Reasoning: Since initial launch of the Wanchain bridge USDC, USDT and DAI have seen steady growth in terms of user deposits, borrow demand and accrued interest in Liqwid. The Wanchain team has proactively pursued liquidity growth incentives since the launch of the Wanchain Cardano bridge in summer 2023. The Wanchain team has shown commitment to improving Cardano DeFi liquidity and is actively pursuing growth tactics with multiple Cardano DeFi protocols.
This proposal will boost utility of Wanchain bridged assets on Liqwid and attract Wanchain users to Liqwid who are seeking liquidity against their holdings. To date Wanchain users have only been able to earn yield on their USDC, USDT and DAI stablecoins with Liqwid. If this proposal is successfully passed these users will be able to tap into liquidity while also earning yields on their assets.
This proposal also represents the introduction of BTC and ETH on Liqwid. As the two largest crypto assets by market capitalization this allows Liqwid to cater to a much larger user base and holder audience.
Risk Parameters: BTC and ETH will have collateral parameters, supply caps and risk parameters equal to ADA.
WAN will have the following collateral and risk parameters:
WAN supply cap will be set to $2,000,000. WAN borrow cap will be set to 1% of the total WAN supplied.
Collateral factor (maxLTV): 51.4%
Liquidation threshold: 51.5%
Liquidation penalty: 15%
*WAN will be supported as an isolated collateral in the ADA market.
@DC1 Am I inferring this statement correctly that USDC, USDT, and DAI will also be allowed for collateral against other Wanchain Assets as stated in Summary Objective #1?
Would everyone also consider allowing USDC as collateral against DJED with the MinSwap Stablecoin swap feature of USDC:DJED. Current liquidity of 8/1/24 300k and the 1 million+ on WAnchain token explorer.
Thanks for clarifying point in my previous post that may have led some to think DJED was a Wanchain bridge token.
@itzDanny
Good questions. My initial thoughts are below, and I am expanding the idea of why it may be helpful to Liqwid to consider USDC as isolated collateral for DJED. However, you may be correct, I am not 100% sure.I would value others takes on it.
Same assets borrowing ADA:ADA to farm rewards only carried the risk of different interest rates and transaction fees.
Different interest rates and loan origination fees. While both are stablecoins, they unpeg and over-egg independently.
Currently, it’s possible to borrow an asset and apply a trading strategy, then supply that same asset. I imagine this to be the same wash trading/hedging/farming rewards level.
I haven’t worked the math on any of the above scenarios.
The general idea was to gauge the interest in USDC as isolated collateral for DJED, mainly due to the min swap stable swap. This would give traders an opportunity to bridge over WanChain assets and keep that Value on the Cardano chain versus sending it back to Wanchain. It would also give liquidators another avenue to access USDC, not via the bridge.
Help support the greater Cardano system.
I support this proposal. I don’t want to side track it with the USDC:DJED conversation. It may be better suited in the USDC Market proposal.
The goal is to enable all Wanchain assets (USDC, USDT, BTC, ETH, WAN) to be used as collateral and debt against each other since they are all Wanchain-bridged assets.
To achieve this, we would segregate these assets from the CNT assets. Additionally, to prevent wash borrowings, I believe we should prohibit the “USDC/USDT” and “USDT/USDC” collateral/debt pairs.
I put together a rough outline. The overall need is for a greater than 10%+ spread to be profitable. Maybe I am looking at it wrong.
Keeping it in-house on Liqwid is better than redirecting folks back to WanChain.
While more stable than current C-Stables, all stables depend on or over-peg 1-3%, which can offer a great opportunity to arbitrage in those moments and allow a revenue stream on the 1% loan fees.
Similar to the USDC/DJED stable swap. I found the last market turn profitable to swap USDC for DJED during the downturn and back when things over-pegged.
Question for me. What makes Liqwid and users the most safe and stable?
Are we worried about wash borrowing as a whole or just on platform?
Fees on the Wanchain Bridge are 1-$10 to move $5000 USDT/USDC, depending on the chain, or $2-20 roundtrip, plus a swap fee.
Overall, I am content with excluding stable:stable borrows , if it protects Liqwid and users.
