VIP-024 Migrate all USDT and USDC > 1M to separate markets

Proposal ID
79bHxcWzkVRrshpRGw4t9bspmei1dmciDUKWvVYjjdZb

What do we propose

Currently, most of the deposits and debt in USDT and USDC markets come from the big players, poisoning the market structure and keeping it congested and non-attractive for regular users. This proposal is aimed to extract those big accounts to separate markets to restore the normal function of the current USDT and USDC markets.

How this will work

  1. Separate USDT and USDC markets will be established. There, the Borrow APR will be set constant to 2.5%.
  2. For any account whose total deposit of all USDT and USDC exceeds 1M, the exceeding part can be moved to the separate markets.

Effectively, for those accounts NET APR(axis Y) will then depend on their total deposit(axis X):

For example, if an account has 1.5M in deposits, 1M will remain in the current markets, and 500K will be migrated. To keep things simple, everything will be migrated in proportion: If an account has 600K USDT_locked + 900K USDC, after migration the balance would be 400K USDT_locked + 200K USDT_deprecated + 600K USDC + 300K USDC_deprecated.

  1. As the USDT and USDC markets would shrink, the limits are to be temporarily lowered to better reflect current structure: 1K if utilisation is > 95%, 2.5k if utilisation is > 90%, 5k if utilization is > 85%, 10K is utilization is > 80%, no limit below.

Why is this important

This maneuver will isolate “whales” and help clear the congestion from USDT and USDC markets at vires.finance, making the protocol more accessible and attractive for everyone.

Transaction Payload

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      "value": 2500000000
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      "type": "integer",
      "value": 1000000000
    },
    {
      "key": "primary_reserves",
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  "senderPublicKey": "3gQ8QUfoGQW6YVuhUv3zuqsbmxbV5F2FAuDXJqVKD6C9",
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  "feeAssetId": "WAVES",
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Doesn’t this mean the big debt in USDT/USDC goes down to 2.5% APR and the payouts for those with $VIRES locked shrinks proportionally? This seems more like a way to reduce the payback burden on those large accounts than a way to clear “congestion.”

12 Likes
  1. All those limits do not make any sense on long term if they can be avoided by creating multiple wallets / bots.

  2. This sounds like it will have a huge negative impact on VIRES holders who locked their tokens for months.

  3. The concept sounds too complicated and raises a lot of questions and looks more like a workaround.

9 Likes

Please explain how the debt will be handled.

2 Likes

Okay so the general vibe I’m catching from everyone on the telegram. And I agree, its a fucking mess.
Not great for long term suppliers and just rewards degen whales.
Going to be a no.

6 Likes

Vote no unless Sasha changes the proposal to increase Vires protocol revenue from 10% to 15%.
gVires holders should not vote to lower their own payouts (again).

8 Likes

I don’t mind you guys making money on taking on the debt. That’s normal.

But this is robbery. This is either Waves itself, unable to pay off the debt, or someone trying to get waves in trouble. Either way, if this proposal passes, I’ll be seeing you in court.

3 Likes

The latest proposals are garbage. In the previous one it was fine to add other currencies, but leaving aside the suppliers of usdt/usdc was embarrassing, when the fault of everything has been the waves assets.

And now they want to get rid of the large holders/debtors of usdt and usdc, who are the ones who do vires profitable. Only a few accounts put the site in trouble and it was because of the usdn depeg.They did not want to liquidate them, because the usdn would go down even more… Oracle for USDN! Fix that which is what matters most and no invent new ridiculous proposals.

8 Likes

many other points of contention

this proposal shall not PASS!
guys, seriously this cannot pass.

2 Likes

Really bad proposal. This will decimate rewards for Vires holders

2 Likes

increase the apr from 2.5% to 5% and increase the revenues share for gvires from 10% to 50% and we will vote yes. in this case the apr for large amount will be lower and reasonable , gvires holder will be rewarded with a net 2.5% (actually it s at 3% , more or less) and the supplyers will earn 2.5% ( as the proposal).

5 Likes

I don’t see the rationale behind this proposal. It lacks foundations and its results are very uncertain. Anything can happen, and I don’t see what prevents whales to borrow at low interest on big accounts market and supply at high interests with multiple small accounts, until the difference in rates is almost exhausted, so rates on small market become topped by low rates on big market. Then what we will do? increase the max borrow rate on big market in order to reestablish current rates on small market? Seems an unnecessary complexity added.

I think the team is pointing to the wrong direction here, or a too circumvented one. I think the main problem in vires is not big players vs small ones, but the high interest rates of non locked supplies, as I exposed on Add factors for reducing non locked supplies APR

So I will vote against this one as is. I can see however, that this proposal, with some modifications, can be a way to implement something similar to a reduction of non locked supplies, if we increase the borrow APR, may be to 10% instead of 2.5%, and increase significantly the protocol share of gvires (75%?), as other ones has suggested. In that case I can rethink my vote.


Update

Notice that. for example, with a base interest rate of 10% and a 75% of protocol share, after a time of adjustments of rates, non locked suppliers will end up receiving a total of 2.5% APR. Locked suppliers will receive a base APR of 2.5%, but a substantial increase of rewards for their gvires. Borrowers will pay 4 times less interest than they are paying now. But gvires rewards share will increase by 7.5x. So, before, if borrowers were paying 100, total gvires rewards were 10. After a modified proposal, they will be paying aproximately 25, while total givers rewards would be 18.75% (75% of what borrowers pay) This is much more in gvires rewards than before, but doesn’t compensate the loss in base locked rewards, which will shrink significantly to 2.5%. This is probably a healthier structure of interest rates, anyway, but it is a matter of another discussion. In any case, it is much more acceptable than the current proposal.

Also, the shrink in supplies base APR would be very big because we are currently under high stress situation and rates are abnormally big. But under normal situation, the difference of base rates between after and before such kind of proposal would be less.

Update 2

In addition, I think that interest rates for non locked supplies APR must be zero. After all, locked suppliers are the ones that provides liquidity in the long term, while non locked suppliers can withdraw when they want and should be intended to collateral provision only, not liquidity. Both collateral and liquidity provision are incompatible with the stability of a lending platform: collateral cannot be borrowed, that is, cannot be a liquidity source. Collateral must always be non borrowable. This can be, however, a separated proposal.

4 Likes

The issue to be resolved is the paydown of the debt Sasha assumed on behalf of the protocol ( Thanks, Sasha!). The debt is repaid by selling USDN for USDT/C. Therefore, if the debt is repaid too quickly, USDN will depeg. If the debt is repaid too slowly, the liquidity will dry up and the compounding of interest may make repayment impossible. This would be tragic for all participants.

What is needed is to reduce the rate on the USDT/C debt. Obviously, this reduces income for LPs and gVires, but that is the price to be paid to save the Vires protocol.

Does this resolve the situation? Yes. Is it the ‘best’ solution? Probably not, but it is good enough. Are there questions about the impact, mechanics, results? My list grows by the hour.

Considering all of the above, i will vote Yes and ask all to consider doing the same.

1 Like

I am going to vote ‘No’ only because this proposal is very poorly explained and does not mention considerations and consequences that will affect regular lenders, borrowers and gVires holders.

I would kindly ask the team to put more effort in explaining those proposals at the moment it is very vague and uncertain.

4 Likes

There wouldn’t be any new borrowing from the Whale_USDT and Whale_USDC markets. Combined, they would be about $133M (we project, maybe more), and they will be immediately 100% utilized since Sasha has already borrowed the $133M. Sasha would just pay 2.5% interest on that $133M instead of the current 40% (much of which is going to the Alameda account).

But, the proposal hurts gVires holders again, which is why I’m voting No. If the Vires protocol share were increased from 10% to 15%, I would vote Yes.

3 Likes

While we all agree the protocol must be saved, why gVires holders vote to decrease their own share AGAIN? Increase protocol revenue share, maybe even just for the new market, and we will vote yes. As it stands, VIRES holders should vote no on this until a more attractive proposal that doesn’t rugpull them is put forth. I am confident a solution exists to ease both the stress on the protocol and save the token.

2 Likes

For me, there is only one thing to consider here: the team still is about to solve the situation. There will not be one single proposal that will implement one change and everything is good again. In contrast, a lot of small steps are necessary. This proposal is one of these steps!

Therefore, for me it is a clear yes!

Notice that a correction of vires share from 10% to 15% does not compensate at all the cut in interest rates that the proposal will have. In my comment I am suggesting to increase vires share to 75%.

2 Likes