Coffee thoughts here, so hope its not too off base!
What if we had a way to deposit bLUNA into a system and segment the staking cash flows into traunches?
Let’s say we have LUNA trading at $6 with staking rewards of 10%, meaning it generates $0.60 per year. What if we carved the cash flows into three traunches, first traunch is first in line and gets all cash flows up to $0.30, second traunch gets all cash flows from $0.30 to $0.60, and the final traunche gets all of the growth (cash flows above $0.60).
I think this could be a novel way to make use of the bLUNA (or other bPOS) asset(s) innovation. Investors with different risk tolerances could buy the different traunches. The safest traunch would be a better asset to borrow against in something like anchor, where as the last traunch could be more of the speculative moonshot.
Right now LUNA is a one-size fits all risky asset. I think there could be a lot of value unlocked by segmenting it to fit individual investors needs. And the same logic could be applied to future POS blockchain assets added
Absolutely, even Binance is doing this for their UST Saving.
Anchor giving out high interest rate to keep the UST instead of dumping UST, then it should encourage a mid/long term commitment.
Also I think we need to cap the minting of UST based on Luna dynamically based on the Luna mcap. MakerDAO did this in the early days (and therefore there were times DAI is over $1). One of the risks with UST backed with Luna is volatile asset:
- everyone knows it, so we are minting UST with more Luna (Over-collateration)
- we also make Luna semi-deflatorial and keep burning
- However during bad times like now even BTC in LFG drops in value - MakerDAO knows it in 2020 so introduces USDC/USDT collaterals.
- L1 token valuation also consider the TVL of the assets of the chain holds. However most of the assets on Terra are UST, and UST is backed by Luna. This inevitably created a loop which increases Luna value in good time, but during bad economic condition we entered the death spiral.
- the above 2 points makes UST even more vulnerable than Single collateral DAI, and as bad as FRAX fork with 0 USD + 100% FXS. As UST off-peg, Luna price is absorbing the volatility of UST and also the on-chain asset valuation.
Therefore other then Traunching of commitment with different ROI, we also need to put a dynamic cap of UST issuance based on Luna’s mcap.
We also need to introduce more collateral type especially stable coins.
We may also do Treasury bond auction for long term commitment for good ROI