[Proposal]

You’re disingenuous as you attacked them as dumpers for example when you were completely wrong, then quickly changed or downplayed your original positions.

I also doubt you’re on the core team of any of these apps tbh bc any real builder would want to increase growth of their product and ecosystem. Fud, again. You sound like someone that works for Nexus than any company building on Terra.

Would I pay for insurance out of my pocket as in pay premiums? On an individual basis, I sure would do it in the use case of alternative high yield savings account on an elegant consumer app.

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I’m also curious, maybe it is incentivizing yes voters in a way but why would Risk Harbor give tokens to someone who votes no? Doesn’t the person that votes no not want tokens anyways lol?

Nah. I am being real lol. You, I or anyone else will get dumped or would dump when a protocol manages $10m but has a $10b market cap.

If you do not think that then you should not work at that hedge fund. I do in fact work at an app that has been mentioned several times in this post.

I am bullish AF on this space but again say that this is overvalued as a deal and will only benefit a few people over the whole ecosystem. It is in my opinion that it would be more powerful to have 1,000 people joining this new economy enjoying the full yield of anchor and posting about it - running their lives through it and growing what we are doing rather than a single hedge fund like you taking what belongs to these people who are bold enough to join this new economy.

These small people are our marketing and best chance at creating a new worlds economy. You are here just to extract value from them and what others have built.

I am also a 7 figure Luna holder and strongly feel this way. We should start with Arrington and no one else since he has supported Luna for a longggggg time.

This is a great proposal and deserves discussion, I think a compromise has to be met with the terms on it though.

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Many hedge funds setup re-insurance companies. You mean to tell me that for every policy they underwrite they hold 1:1 dollar for dollar?

This is clearly not how insurance should work. I find it hard to believe when Do and the team announced the $1b it was with the intention to function in this simplistic manner that cannot scale.

In fact, risk harbor’s token will be quite worthless if this is how things work. There is no business model and zero sophistication.

Now if $1b protects $10+ billion, maybe there is a conversation to be had. But even then there should be tranches released as you progress, and obviously a plan to not suck up community funds indefinitely.

Many aspects don’t feel right, and as much as I don’t want to sound insulting, it feels to me as though the Risk Harbor team placed little to no thought in all of this because they recall Do saying $1b for ozone. Thus there was a belief that it would be super easy to get $1b.

Terra can do better and MUST do better.

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Yes we have a reinsurance arm and I agree with all of your points if you we were well-versed - I don’t think you’ve done the appropriate research. Read their whitepapers, proposal, and app, deeply. They already built an AMM that’s able to 4x leverage based on different parameters meaning that 1B capacity can protect up to 4B. That’s the v2 ozone they’re building now (i thin?). They are the most capital efficient approach to insurance and I’m sure this is what Do realized. I believe their mechanism is better and much more simpler than the original Ozone mechanism. They also built a risk engine that automatically assesses risk that I’m very excited to learn more about when fully released.

The only mistake I think the team did was undersell the features and mechanisms they built, because obviously few are actually putting in time to research what’s actually going on.

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Now if $1b protects $10+ billion, maybe there is a conversation to be had.

In the original Ozone proposal, Ozone Insurance Mechanism v2.1, the idea of leverage underwriting was raised by Do. Risk Harbor V2, currently live on Ethereum does exactly this through our custom AMM. You can read about it more in the Ozone whitepaper: RiskHarbor-Whitepaper/Risk Harbor Ozone Whitepaper.pdf at main · Risk-Harbor/RiskHarbor-Whitepaper · GitHub . We are actively porting this AMM over to Ozone so that we can achieve greater capital efficiency and capacity on a underwriting vault composed of various Terra protocols.

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Respectfully, I disagree.

Taking emotions out of this, how can they dump if they’re on a 4 year vesting schedule and 1 year cliff after token launch? I can dump long before they can sell anything so not sure about the argument there. I’m pretty sure it’s much more beneficial to airdrop recipients here.

I really do see your point but the reality is that institutional and retail capital have a symbiotic relationship, both need each other. The reason why I keep responding bc I despise this argument of us vs them, bc not all funds are the same. Some are mercenary, some enjoy new paradigms, and others are a culmination of the two.

I believe any ecosystem strongly benefits from insto and retail capital otherwise they won’t have a chance at long-term sustainable growth.

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It is in my opinion that it would be more powerful to have 1,000 people joining this new economy enjoying the full yield of anchor and posting about it - running their lives through it and growing what we are doing rather than a single hedge fund like you taking what belongs to these people who are bold enough to join this new economy.

These small people are our marketing and best chance at creating a new worlds economy.

If you work at one of the apps then you would know that there are many people whose life savings are in Anchor and are actively looking to buy protection. We’ve talked with numerous people who ask wen ozone and wen more capacity everyday because they want have some level of assurance for their deposits since it’s everything they have. If you check our Discord, we provide personally provide guidance for new DeFi users all the time in their Terra journey from using the Terra Bridge, depositing into Anchor, and purchasing protection. If your argument is that we should focus on the small guys because that’s where the next 1B+ users of DeFi are, then supporting Ozone is the way to do that because most of the public isn’t risk-on. Instead, they are just people trying to escape the affects of inflation. It’s a privilege to risk your capital in return for greater rewards, a privilege that a majority of everyday users on average can’t afford to take.

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Is the $1b purely to insure up to $4b? (Feels like too high of a ratio, but obviously that’s what you built) or are some of these funds going to be allocated to the team as compensation, to reimburse previous expenses, etc? If they are being used as compensation what does that look like?

If the funds are strictly for underwriting I still think releasing funds in tranches based on verifiable deliverables has to be a critical component to this proposal.

I also stand by the bribery for votes being absurd because that infers even you don’t believe in the merits of your own proposal.

This, can you @tooney comment on this?
What do you guys see 1B UST from community pool yield for coverage?

This is one of the most important metrics.

I think the team pretty clearly stated above the funds are only for community underwriting, this isn’t for any company operations.

On the bribery votes, I understand the perspective of maybe not only incentivizing yes voters but at the same time, no voters shouldn’t get tokens imo

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So you are saying, they would get 1B UST from the COMMUNITY FUND and only airdrop to those in the community who support it?
Personally I couldn’t care about the airdrop, but what you have to realize here is that we are trying to have a constructive discussion, we agree it’s beneficial but we disagree on the terms.

That’s why this forum is important, to be able to debate and improve proposals and ideas.
When you have a proposal like this that offers brides to yes votes, this is clearly anti community driven.

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I don’t feel like their proposal was written well and completely transparent.

If this is the case then I just don’t understand the request for $1b and instead work with a commitment for releases in tranches.

This is a competitive world, if a better protocol comes up and Risk Harbor doesn’t deliver, we as the community should be able to re-allocate funds in a manner that best suits our interests.

What is the recourse mechanism to recapture up to the $1b in the event they don’t deliver? For example if demand ends up being much less, this money is just going to stay in the protocols coffers? Again, this proves tranches based on deliverables is a logical conclusion.

I think the criticism at the moment is warranted.

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Don’t think you’re reading

I respect your point and understand but respectfully disagree that it’s anti-community. Transparently, I don’t care for the airdrop either way yet personally still don’t see a big issue incentivizing voters. If I were in their shoes I don’t see why I should airdrop tokens to those that voted no.

Imagine they vote no, receive airdrop, then put up a counter proposal and remove funds? Very unlikely scenario yet technically possible.

I really believe we should give them a chance though, this is the an incredible public good that will deeply benefit the community.

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In other words the counter proposal in the future would be completely in Terra’s hands to recapture the funds and not in Risk Harbor’s?

And I did read, maybe it’s just not written well.

Here’s a reasonable revision that should resonate with a hedge fund :slight_smile: how about instead of the airdrop, the community is compensated by way of gross revenue back to the community pool. This way the community has a vested interest now and into the future. (Of course this is in addition to tranche releases)

And if the community later wants to divest that stake for tokens or what have you we can.

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Hey Drew, I love what you guys have built on Ozone. Maybe a review to the airdrop to appease others but otherwise and fully support this proposal. I have almost 75% of my NW ~ 7 figures on Anchor and this resonated with me so much. If Ozone capacity increases, I want to increase my Terra position by 95% so really hope this proposal passes. As everyday people who luckily discovered Terra and also work in finance, I agree that most of us have mortgages and families to feed and unfortunately cannot afford to be apes, even if we wanted to :stuck_out_tongue: so we really need Ozone. I also do agree with the proposal fully that large capacity will make other depositors more excited and willing to enter the ecosystem. This is a HARD YES!!

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I think there is a great deal of missing the forest for the trees here.

We can probably agree that there is little difference in holding UST in the community fund vs providing it for underwriting in the worlds where no exploits occur. If, however, Anchor does suffer a significant exploit, it would be a dark day indeed for the LUNA ecosystem. I imagine there would probably be calls to use the community fund to reimburse part of the losses. Now, I am not sure whether such a proposal would pass. Neither is anyone committing their funds to projects in the ecosystem right now, which is unsettling. As has already been described in this thread, this is holding back significant amounts of capital and users from using Anchor (and other apps in the LUNA ecosystem).

Precommitting capital to covering this unlikely event not only helps in the worlds where nothing goes wrong, but it also arguably even helps in worlds where the worst comes to pass. If a significant portion of TVL is covered, a panicked market reaction is comparatively less likely. It is this dynamic that causes many people to describe this as a public good. Many layer 1 protocols subsidize/invest in their developers and ecosystem, but LUNA would be the first to make a strong push for insurance.

Another thing I would urge you to consider is that Ozone intends to cover much more than just Anchor in the future. It has ambitions to cover a wide diversified set of protocols and risks with a reasonably high degree of capital efficiency. The goal is to be an insurance provider for the entire ecosystem and facilitate innovation/new investment.

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We already built systems for leveraged protection so we can provide protection on multiple protocols with the same underwriting assets. Those systems are live on Ethereum mainnet currently and engineers are currently working to build the same systems in rust so that they can be used on ozone. For more details on the technical implementation of AMM and leveraged vaults, see the v2 white paper link in the original proposal.

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Institutional clients want exposure to the larger yields terra ecosystem offers but in order to do this there needs to be ample underwriting capacity to protect the capital therefore I see it as absolutely necessary to pass this proposal.

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