Proposal: optional cross token witdraws

I think a feature that can help to unfreeze faster the situation now and in similar situations is that a supplier be able to optionally withdraw it’s supply or part of it in a different token. That will give more usability to the borrower collateral: if the borrower can’t pay me in the token I supplied, because there is not enough liquidity of it in the ecosystem, I can optionally accept to be paid in the token he is using as collateral. At the same ratio used by vires. This helps both sides, as it adds another degree of freedom. And allows to alleviate liquidity pressures in the ecosystem.

I think in someway LP tokens were designed for easing this kind of situation. However, they don’t connect suppliers with borrowers, but instead, suppliers with speculators, and don’t resolve the problem of liquidity. Same happen with borrower liquidation. It requires a specific condition and again, this don’t solve the liquidity pressures in the ecosystem, thus leading to price volatility, even on stable coins.

For easing the liquidity problem we need a direct connection between suppliers and borrowers collateral. The suppliers can optionally mark to withdraw its supply on a different asset, and when this happen, borrowers will see that can pay part of its borrow with another asset. As they repay in this way, suppliers will see that they will be able to withdraw part of its supply in the alternative assets he marked.

An alternative implementation is to create some matcher that matches repayment orders with withdraw orders, based on a FIFO queue. This may be more complicated to implement, but probably is a more solid and flexible approach.

May be this second alternative could initially be implemented by introducing another kind of token, similar to the suppliers LP tokens, but on the borrower side. Then, add market pairs for each supplier and borrower token. The borrower token must be issued with the desired amount of borrow and an equivalent amount of supply from the chosen collateral (using the vires ratios between them). Then, supplier can exchange his LP tokens with the corresponding borrow-collateral token issued by a borrower. Notice that this uses market instead of a fixed rate, but still skips speculators intermediation, which is what alleviates liquidity pressures. And seems a quite easier way to implement the feature, as we rely on market matcher instead of having to implement a different. one. The only problem I see with this kind of implementation is that some vires exchange ratios between collateral and borrow assets, may change between issuing and exchanging, so orders probably need some kind of expiration, or issuing of borrower tokens need to add a margin of collateral that is returned to the issuer if was not used.

Just throwing possible implementations. Developers must judge what is easier to implement.

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I mean… If I put BTC as collateral, and don’t pay, isn’t it the collateral that gets taken in case of liquidation? I don’t see why it shouldn’t go to the pool I borrowed from. But I don’t know how liquidations work on here, I don’t borrow money.

The main problem with all of this, is that the whale put up proposal to put a cap on borrow interest rates. He got rejected, so bought up extra Vires, then put the same proposal and got it accepted now that he had the most to vote with. Since interest is capped at 40, we don’t see the liquidations we should, as they made enough shorting to make up for the slow compund. It’s putting a huge barrier on liquidity, as everyone only sees the fact that they can’t withdraw, so they panic, making everyone trying to withdraw at the same time constantly, every day. What most new people see, is that they can’t withdraw again, so no new money coming in either. Which is a good thing tho. Could get waves sued if they try to attract new money, for the sole reason of bailing out old money… That’d be considered a scam, or pyramid scheme… Either way, waves would go down if that was the case, they in the US now, the IRS don’t like competition and they got the CDC as bulldog for these things.

Selling debt is would be a good thing to have as an option, if dealt with properly. There are cases, where traders/speculators/etc, are willing to take the risk. Especially in the case where they’re buying the collateral as well. But I don’t think with 5% liquidation penalty, there’d be much market for it. I don’t see anyone buying the risk at max 5% discount, and I don’t see anyone selling with only 5% penalty. If penalty was raised, which it should be, risk for debtors is far too small on this platform, they’re rewarded at suppliers expense, there’d be a market for it tho.

But really, we can’t do shit about it. team holds suppliers hostage in their war against Alameda… They got enough locked vires to reject any proposal that don’t favor the war, so suppliers can basically just vote to accept proposals, hoping it will move the war along, and proper fixes will come in the future. But there won’t be fixes… Utilization will be at 100% until there’s no more supply. Cuz no one would ever put their money here, looking at how they’d just be fucked who knows how long…

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No. Liquidation can be performed only when the health of the borrower reaches zero, and the collateral is received by the liquidator, not the suppliers. Liquidators then has to sell the received collateral in order to pay the acquired loan. The suppliers are not involved here, and don’t change the asset they withdraw.

The proposed mechanism is different: it connects directly borrowers and suppliers and allow suppliers to withdraw in a different asset that they supplied.

Aah gotcha, good to know… I kind of just assumed that was how it was, but good to know it’s not… Yeah, I could see how there’d be a market for the option to use liquidators or just get the collaterized token directly.

Regarding the intentions of the team, I don’t think this has to do with the war against alameda anymore. They are paying lots in interesting for just sustaining such kind of thing.

This is really about sell pressure over waves, and all the consequences it may have as collateral of USDN. In order to pay USDC/USDT, the procedure is to burn USDN and sell waves on an external exchange (there is not enough liquidity of USDT/USDC on the ecosystem for a direct exchange between USDN and USDT/USDC). So, repayments has to be done slowly.

This proposal may help to solve that problem partially, because it enables paying USDT/USDC debt directly with USDN for those USDC/USDT suppliers that accept USDN instead.

That would make it even more of a joke tho. Guess I’m out.

If what you say here, is actually true. Even Alameda got grounds for a lawsuit.

So, big repayments will destabilize waves price, USDN peg, and that will also worsen the problem in vires But you think if that is true, it is even more a joke?

If I what I say is true, this doesn’t change anything. Any supplier knows in advance about the risk of unavailability. And if not, they didn’t read the rules before investing. You cannot advance a lawsuit against others based on your own mistakes and disinformation.

Normally, yes. You would be correct. But… That is assuming the rules don’t change. I locked money in governance at 250% and in USDC at 105%. Waves cut that in half, to save themselves. Sure, rugpulls are always a risk, but assuming it’s not a rugpull, it’s a hostage situation. The only thing I can do, is vote yes to ANY proposal, or wait another month… And so far, the only proposals that have come up, have heavily favored the two whales and people with debt, at the expense of suppliers. It’s market manipulation, and the SEC is gonna come charging when they smell a billion dollars to snatch up, now that waves is regulated by US law. Watch Alameda retaliate with a class action lawsuit.

Yes. This is all most definitely a joke. Waves have zero clue about business… It’s a bunch of autistic developers, who had a good idea, and now they have zero experience with money, while having waaaay too much of it. Yes, a joke. They need to hire some damn economers, before they fuck the platform, instead of just meming “he sold, pump it” every time.

Rules can change via the DAO, and that is part of the game.

And it was not about saving themselves. They have supply to repay the borrows, and they could have paid and avoid the current big cost in interest rates they are paying. It is about saving the entire ecosystem. May be you don’t care, because you only want to receive your money and go out. Others like me don’t want to leave, and defend the ecosystem and do proposals for improving it and fix issues.

May be you don’t understand that DeFis are experimental everywhere. All platforms has its issues. And if you expected everything worked perfectly from begining, it is your mistake. You should have invested in traditional markets instead. Cryptos is not for you so, stop finding culprits outside you.

You mean the DAO that Waves advertizes as decentralized, while they hold most of the governance lock themselves, so they’re the ones changing the rules? That could be seen as waves lying.

That’s what central banks always say as well, when they manipulate markets. Now we got the highest level of inflation in modern history, almost every fiat currency is tanking, food prices spiking. (Don’t you dare blame this on Russia. They were going up long before all that trash.)

I’m locked into WX for 4 years. With enough WX to influence the votes that don’t actually happen there, cuz waves overpromise and deliver far past deadline. I care about the success of this platform, not due to ideology, I couldn’t care less about being a fanboy, if I make money I’m here, if I don’t, I’m not. So far I’m making money, but the way things are going, my money is gonna end up funding another war through the US government, when the IRS and SEC shut Waves down for market manipulation. I can care, and not blindly accepting what they’re doing, I’m not here for church or be part of a cult.

Did you not read what I wrote? They NEED to hire help from economists. Cuz they’re autistic developers, who do not understand economics. They will quite litterally kill this platform, if they continue on this path. I probably understand business better than most people here, since all my money is from before crypto, from running actual businesses. Sasha is a smart guy, but he’s socially inept and partially retarded. Remember how he said on livestream, he’d suicide if WX didn’t succeed? It’d been slowly going up during the stream, and dumped the second he said those words.

I’m not going to bother responding to the last parts other than this: I never said I was a victim in this. I stated some facts on how it’s seen, what CAN happen, and what I think about it. You however, is part of the problem here… You have opinions about things you don’t understand.

How do you think a DAO can even change the code in order to improve the system? DAO is experimental. You are still unaware of that. All DeFis are experimental. Again, don’t blame others for your investment decisions.

And seriously your argument against improving the system is because central banks do this and that? With your criteria there shouldn’t even be smart contracts, because, guess what? they are made by a team of developers so, you have a centralized point here.

The team already have financial and economics advisors. I can say that because I am economist, and dedicated to financial markets since long, and their design decisions has plenty of sense. This is not related to economics, it is related to smart contract designs, and something you seem not to understand: we are in an experimental stage of using them for DeFi.

Great discussions. It helps us lesser seasoned individuals whom likely do not understand the intricacies and dynamics.