Overview
There is a new proposal to add a EURO stablecoin (TerraEUR - EUT) to Terra currently outstanding. This would allow users to swap Luna or their existing stablecoins in UST, KRT, SDT or MNT to EUT. In this volatile macro environment, allowing users to swap into safe haven assets such as the Euro is highly desirable. There is growing need to enable a richer fx market on Terra, to allow users to speculate on foreign exchange volatility.
The Proposal
Proposer: Do Kwon (Terraform Labs, Founder)
We propose to add the following currencies to Terra swaps:
- CNY
- JPY
- GBP
- INR
- CAD
- CHF
- HKD
- AUD
- SGD (Added after community feedback)
These are (along with USD and KRW) the top 10 fiat currencies by market cap as listed on FiatMarketCap.com. We can add more fiat currencies as markets become more liquid, but coverage top 10 fiat currencies is necessary to form a minimal viable set of currencies to allow users to trade fx markets on Terra.
Given these are all highly liquid currencies, we propose they go live with a standard tobin-tax rate of 0.25%.
Type
Parameter-change
Changes
[
{
"key": "whitelist",
"value": "[
{\"name\":\"ukrw\",\"tobin_tax\":\"0.003500000000000000\"},
{\"name\":\"usdr\",\"tobin_tax\":\"0.003500000000000000\"},
{\"name\":\"uusd\",\"tobin_tax\":\"0.003500000000000000\"},
{\"name\":\"umnt\",\"tobin_tax\":\"0.020000000000000000\"},
{\"name\":\"ueur\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"ucny\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"ujpy\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"ugbp\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"uinr\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"ucad\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"uchf\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"uhkd\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"uaud\",\"tobin_tax\":\"0.003500000000000000\"},
+ {\"name\":\"usgd\",\"tobin_tax\":\"0.003500000000000000\"}
]",
"subspace": "oracle"
}
]
Cost / Benefit analysis
- Benefit: users on Terra would be able to gain access to many more currency pairs on Terra swaps, making it a much more viable option for fx trades.
- Cost: Oracle feeder providers will have to upgrade software to support the new pairs being added, and validators will have to make sure they run the new and upgraded software. Submitting oracle votes will also now be slightly more expensive.
Next steps
This proposal will sit in agora for the next two weeks before the proposal is submitted onchain.