I think that Anchor Protocol should only provide the 20% APY to those who stake a portion of their LUNA, while those that do not stake LUNA would be given a more sustainable APY (e.g. 15%). Other blockchain competitors of LUNA may just park their money in Anchor Protocol for the benefit of their blockchain without contributing much to the Terra ecosystem. I believe this is one of the reasons why we see the price correlation between the demand for UST and LUNA are not that highly correlated. Maybe we will see a higher demand correlation with this proposal?
I haven’t thought about this in depth yet, but at first glance your idea sounds genius !
While this will definitively boost luna demand, i don’t see how this could be implemented.
What about luna derivatives?
All for it. And maybe also add some incentives for those that stake LUNA for a longer period ( 6 months/ 1 year and more).
I stake Luna, so I’m greedily in support without really thinking about the outcome of this change
Agreed. Incentivizes supporting the underlying protocol. Also like the idea of @edgarintimbuktou to tier APY according to how long LUNA has been staked.
I like your proposal and agree for the need to create a more balanced incentive. However I would heavily caution against trying to encourage a correlation between demand for UST and LUNA because you risk doing more harm than good.
A huge factor which leads to fast adoption is that “fiat minded” people (for lack of a better term) can deposit without ever needing the exposure to LUNA, and reducing the incentives for those people would have the opposite to the desired effect. For instance: if you were to set a flat minimum LUNA staked amount to receive full APY(of e.g. 15 LUNA) you would greatly lessen incentives for small depositors (who are not the problem at all) while larger depositors would probably consider whatever the minimum staked amount to be completely negligible. There would be ways to find a happy medium I’m sure, so I look forward to seeing what comes out of future discussions.
Could do a reducing interest rate at higher deposit values unless Luna is staked?
Thinking it through a bit more. Would have to be a sufficiently small value requiring staking to disincentivize the creation lots of small wallets but also large enough value to still lure in the average normie without requiring them to stake.