Whitelist USDC-USDT & ATOM-LUNA LP Tokens as Alliance Assets
Overview
Proposal
- User & Capital Inflows: Millions of dollars will flow into the Terra economy from users within and beyond Cosmos.
- New DeFi Apps: Terra ecosystem builders will benefit from robust stablecoin and Cosmos token liquidity, providing fertile ground to build powerful new DeFi applications.
- Increased Transaction Volume: DEX aggregators will route stablecoin and ATOM token swaps through Terra, increasing transaction volumes.
- Brand Awareness & LUNA Alliances: Showcasing Alliance in this way will boost Terra/Alliance/LUNA visibility within the industry and provide a powerful example of how Alliance can be utilized to strengthen decentralized economies, opening the door for future Alliances between LUNA and other chains.
- New Assets & Low Slippage: Terra users will benefit from an expanded range of crypto assets to trade, coupled with the advantage of minimal slippage, regardless of trade size.
This is a great proposal to bring permanent native stablecoin and ATOM liquidity to Terra and I fully support it. However, there also to be a liquidity pool that links LUNA to either USDC or USDT. For this reason, I would recommend a third pool, LUNA - USDT. Many Cosmos chains already have USDC pools, and a USDT pool would be something unique to Terra.
Also, for this proposal to work, the Kava chain must first be fully integrated in Station v3. I have no idea what the current state of this is, but I’m sure TFL is working on it.
As for the concern about Luna farmers, I think the benefits far outweigh the negatives, and therefore will positively affect Luna’s price regardless. And as for which DEX to use, personally I would go for URA, but Astroport or White Whale will work too.
In conclusion, the best proposal I have heard in recent months. What are we waiting for?
I will only support this prop if all terra dexes are included. If it is an Astro-only prop, NFTswitch will vote NO.
Wagmi or nothing.
🏴☠️✊🏻
⌛️⌛️⌛️ Waiting and Waiting to proceed to next step. @Zion
I like the idea, and would support an Astroport LP.
Is USDC/USDT going to be a useful LP pair though? Agree that we need native stablecoin liquidity, and I’m keen to use noble USDC here so it can be sent to/from EVM chains with cctp.money. But there are no other pools on Terra with either of these tokens at present. So how would this pool be used? For example, if I want to trade LUNA to noble USDC, I would still have to swap to axlUSDC, and then I’m stuck. I would send the axlUSDC to Osmosis to swap it to noble USDC.
@Chris Amani suggested a third pair could be added: https://twitter.com/fleece_cannon/status/1758596187941478791
I would think about adding something with high liquidity+volume paired with noble USDC, such as LUNA. axlUSDC could also make sense, though there are ‘transmuter’ pools on other chains that swap these for no fee. Then again - it removes the need for the USDC/USDT pool unless you specifically want to get Kava USDT.
AxlUSDC/Kava USDT, or LUNA/USDT could be options. For now they would mostly be used as hops to get USDC out of the other pool, USDC/USDT, but at least then all the pools are useful. Hopefully in future Kava USDT is more widely accepted.
After reading Philipp’s comment about LUNA becoming a farming coin for whales with stablecoins, my preference would be to have 2 pairs:
LUNA/ATOM
LUNA/USDC
But if there is a genuine reason for USDC/USDT, I would suggest
LUNA/ATOM
USDC/USDT
LUNA/USDT
This way at least the third pair still maintains demand for LUNA.
Overall in support however I think a take rate is necessary in order to offset the farm & dump of LUNA that will surely happen due the attractive APYs.
There is a couple of considerations I would like the proposer to integrate before putting this on-chain.
1. Allow users to choose the DEX they are comfortable with.
Similar to how the balancing mechanism for ampWHALE & boneWHALE staking works in the Alliance Hub Contract, that balances rewards based on user deposits. This will eliminate any discussion about favorism and allow users to decide which DEX they support. The oracle would work similar to the one used for ampWHALE / boneWHALE, that the staked underlying LP value in dollar is measured and based on that amount, the rewards are distributed. This allows a sharing of liquidity across Astroport, WW, Uranus and whatever innovative DEX that might launch in the future.
2. Post it as 2 Proposals
Please post each of the LP tokens and reward weight as separate proposal. I see the utility in incentivizing ATOM - LUNA liquidity. However I don’t see a valid reason for building up USDC-USDT liquidity, except only for farming LUNA for whales, so attracting mercenary capital. I would like to see you go more into the detail for the USDC-USDT LP liquidity requirements.
Astroport came to the conclusion to heavily cut incentives on their USDC-USDT pool due to low usage and that there aren’t even many use cases for USDT in Cosmos.
3. Take rate
I think this proposal is missing a key point that is quite important for the utility of alliance, and this is the take rate. In the best scenario for the community the community pool will start acquiring chain owned liquidity. This means that spent incentives have a permanent effect. The idea was to run a community delegation program that stakes 150M LUNA to start aquiring alliance LP assets for the community pool. With instead TFL running the Delegation Program, it still makes sense to use this mechanism to build up permanent chain liquidity. (With a pledge from TFL to give Alliance Assets to the Community Pool)
Details here: https://commonwealth.im/terra/discussion/11300-unleashing-the-power-of-alliance-a-framework-for-economic-growth
Without the take rate, the proposal will turn LUNA to a farming coin.
4. TFL Provided Liquidity
Based on the “TFL Community Proposal”, TFL advertised vast external capital available to be deployed to Terra, and one of such mentioned assets was stablecoins. So I assumed that TFL wanted to deploy this liquidity without the requirement of incentives from Terra Stakers. With the recent ch. 11 bankruptcy filling it I understand that the promised liquidity needs to be aquired otherwise, but it opens up follow up questions regarding the TFL 150M LUNA grant.
That is a good point. A LUNA/USDC pair might be better, maintaining demand for LUNA instead of it becoming a farm & dump coin.
However I don’t see a valid reason for building up USDC-USDT liquidity, except only for farming LUNA for whales
Great idea, which will certainly bring enormous benefits to the entire Cosmos ecosystem! Incentivized stable pools are among the most sought-after destinations in crypto and what is proposed here will result in a lot of attention and TVL. Whitelisting LP tokens only from Astroport, however, will result in all other dexes slowly dissipating into obsolescence. A little less picking sides, a little more WAGMI please! :)
This proposal leaves out the other dexes that are on Terra and uses Astroport which is on Neutron?
My only input is to add my voice to the rest of the community that says we need to focus on the apps and teams that deserve it, that have risen together from the ashes in solidarity.
Rethink working with Astroport when possible. Don’t fade the Moon, it always rises
I only see astroport as dex here, somehow they have turned their backs on Terra. But white whale + ura was there and does everything. So I think it’s unfair to attribute it to astroport alone. If you see that Mars apollo etc. are all on neutron, it’s not fair to terra.
In the current version of the proposal, I am voting against it! It’s not necessary to incentivize specific liquidity pools for individual DEXes.
If anything, I would secure equal Alliance Inflation for all prioritized DEXes on Terra to be distributed equally. The volume of, for example, USDT-USDC on Astroport with $5k volume in 24 hours raises the question of why a larger liquidity would even make a difference for that specific DEX. Then, we might as well give all other DEXes the chance to distribute the Alliance Inflation equally.
I believe Terra should approach a proposal that addresses all DEXes on Terra and not go for DEX-specific proposals for Alliance Assets.
Please completely rework it in this form!
I agree with the sentiment of this proposal. Staking LPs to the chain is a truly fascinating concept and seems to be working well for Migaloo who I believe were the first to do this.
Despite this, two main issues spring to mind when reading the proposal:
1. Why Astroport? Migaloo and WhiteWhale have shown consistent support for Terra and its community. Not only has the WhiteWhale DEX shown unwavering support the Migaloo chain was the first to integrate Alliance and already uses the alliance tech to showcase its ability to stake LPs, ecosystem tokens and soon BTC and ETH.
Solution: Allow WhiteWhale USDC/USDT LPs to be staked. Either solely WhiteWhale LPs or divide the by to and allow both WW LPs and Astroport LPs to be staked. This allows for more projects and users to benefit and helps recognise the Alliance between the Terra and Migaloo communities.
2. No reward for LUNA stakers. Astroport will get risk-free liquidity on their part and users will likely use the pools to farm and dump, as per the usual for liquidity incentives.
Solution: I believe a take rate should be introduced to reward LUNA stakers. Not only will this diversify Terra staking rewards it will also be a big selling point to for users to stake and earn a stable, yield-bearing asset.
I fully support this proposal and trust that it will proceed without any further delays.
- Whitelist the LP pairs as Alliance assets and allow the LP of any DEX that creates the pairs to be staked as Alliance assets. Such action will boost the competition between DEXs and force them to work harder to attract liquidity.
- Require all DEXs that want to be listed on alliance to share part of their inflation/rewards with the LUNA community - e.g. via direct LUNA staking rewards, require them to allow LUNA staking via Alliance (like White Whale) or allow them to earn airdrop points (like URA)
- Ask all DEXs to include clear and visible information that the additional yield of the LP staking is powered by Alliance/Terra and create clear expectations how they will promote Terra/Alliance on their socials
- Reduce the initial allocation of inflation by half and release the second half if the results match the expectations.
- This would build up Terra Community Pool POL.
- It would educate yield farmers about how the Alliance Module operates. I think this could be beneficial for adoption of Alliance throughout Cosmos. Take Rate & Reward Weight are challenging concepts to understand.
A user provides liquidity to the USDC - USDT or ATOM - LUNA pools on Astroport using Station Extension
TFL will publish two future proposals on Commonwealth: one to incorporate ALP as an Alliance asset and another to whitelist USDC - USDT and ATOM - LUNA as Alliance assets.