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

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

I am okay with sacrificing to not kill the platform and waves in general.

i’m just not okay with sacrificing everything, when other people is making bank on my sacrifice.

4 Likes

After todays discourse Im joining the No but if revenue share goes over 35% then maybe camp

1 Like

This offer will simply kill Vires holders. What will happen after it passes:

  1. gVires APY will drop from 130% to ~20%.
  2. As a consequence, the price of Vires will begin to plummet because:
    a) Vires will cease to be an attractive investment. For the sake of 20% APR, it doesn’t make sense to lock up money for 2 years.
    b) Existing gVires holders will gradually withdraw from the protocol, trying to save something.
  3. When the price of Vires drops to $5-10 - the percentage of gVires will return to ~130%.

In the end, those who bought and locked Vires at $50-100 will be completely screwed. Example:
You bought 100 Vires for $10,000.
Already claimed: $2,000.
Current amount in gVires: $4,000, but you can’t withdraw it. And after the price drops, they will turn into ~$1,000.
It would take more than 7 years to take your money back after the offer is accepted!

But I want to remind you that it was gVires holders who agreed to lower the maximum interest on the loan from 80% to 40%. This was done for the sake of protocol in hopes of solving the problem. Is this the kind of solution we deserve?

If the current proposal is accepted, it would be evidence of manipulation by the team. Because people won’t shoot themselves in the foot. Especially those who have invested heavily in the protocol. I vote against it.

6 Likes

You are thinking about the consequences at the exact moment when the proposal passed, without thinking about the momentum that it is going to cause. Let me try to answer point by point:

  1. gVires APY will drop from 130% to ~20%. Indeed, the APY will drop at the very moment, however this APY is not what you see in the bank, it is not fixed and it is a just a reflection of various parameters that constantly change without your control. It is better to not look at the APY but analyze the root parameters that produce it, which are the landing/borrowing balance and the token price, and these things are out of your control and depend solely on the market conditions and the health of the protocol itself.
  2. As a consequence, the price of Vires will begin to plummet because Vires will cease to be an attractive investment. that is only your guess. Indeed, the dumb investor may look at 20% and think “gosh, what a low income! I will go and invest in some other place where the percentage is far higher”, on a bearish market, yeah… The smart investor may read the docs, understand that this percentage is actually a reflection of various parameters, understand that it is very dynamic what really matters is actually the health of the protocol and the landing/borrowing balance, and act accordingly. Idk what is better for the protocol – attract dumb investors or smart investors, probably both at some proportion, which means the protocol already attracted many dumb ones, it is time to attract the smart ones.
  3. because existing gVires holders will gradually withdraw from the protocol, trying to save something, again, that is your assumption which is based on your understanding of how people will act. But you don’t know how they will act. There are people who think that the proposal is what is necessary for the health of the protocol because it helps to overcome the liquidity crisis during on the bearish market, the others will think “well, this is it, i expected to constantly earn 150% from my investments $100 per token, I quit”. Ones will start to sell the token, others will start to buy them, and nobody knows what will be the balance.
  4. When the price of Vires drops to $5-10 - the percentage of gVires will return to ~130%., yes, you caught it right, but who said that this is a bad thing in the long run? those who trust in the protocol will buy these cheap tokens, others won’t, you dont know what will happen and the token price is a reflection of a market conditions, this proposal definitely may affect it in some way, but you dont know how exactly. For example, I see that the proposal may actually help the protocol in the long run and help Sasha to pay the debt at the very moment while the team is working on other solutions that Sasha announced (like USDN price using oracle). These things need to be developed, tested, tested again, modeled, etc. etc., and while the team is working on that Sasha need to repay to keep the existing suppliers and holders to earn at least something and ably to withdraw at least something.

In essence, i dont see the price of the vires token drop that low just because there are people who want to buy them (i, for example), also with the prcie of $10 it will be much more affordable to buy 1000 tokens and create your own proposals, which is nice, and since this proposal doesnt increase that amount significantly for me it sounds like a clear indicator that the team doesnt expect the price of the token to drop that low.

Thank you for your reply, art_artemev. Indeed, for the most part, my calculations are based on my assumptions. But, they are not unfounded, and here is why:

  1. The proposal does not solve the underlying problem of the protocol. Although we would expect a solution after reducing the maximum percentage from 80 to 40.
  2. 130% and 20% have the same risks in this case. And smart investors assess risk first.

For gVires owners, the current proposal forms a big risk that could result in losing 80% of the deposit. You correctly noted, we don’t know how the price will behave. But we have to consider best-case and worst-case scenarios. Let’s estimate the cost of the trade-off in this matter:

~ 371,582 gVires we have now.
~ $15,000,000 is their current value ($40 for 1 Vires)

How many gVires holders don’t want to take on the new risk? Let’s assume 50% (probably less in reality).
Total: $7,500,000.

Considering that the maximum percentage was lowered from 80 to 40, and will now be lowered even more, that’s a very small amount. Plus, they won’t have to pay any interest later on. So let gVires holders have a choice! Withdraw now with a 10-20% loss or wait for better times for the Vires Protocol.

2 Likes

I really don’t like being talked down to, so let me respond in kind.

  1. This is all fine… IF you didn’t just hustle people into locking their token for up to a year, with the promise of APY. That was something you yourself made happen, and now we’re just supposed to be happy that you propose to kill our APY afterwards, and we’re wrong for considering APY as a factor? And don’t give me that “if you had your money in the bank” bullshit. I didn’t put my money in the bank, I put my money on your shitty platform at 100% util. expecting 100% util to pay as promised. And now my money is stuck, while you want to remove the 100% util payout.

  2. Lol. just lol. Really, it’s just a guess, that vires price will go down with APY? Like we didn’t just see it happen from 150 to 50$, when APY was 250% at 150?

  3. What a joke reply. You’re talking to damn investors who’d be selling. you arrogant…

  4. EVERYONE who bought at 100 - 150$ for 150 - 250% APY, says it’s bad that price drops to 5$ when it means payout dropped from ~200 per gvires a year, to measly ~5$ a year… Every single one thinks that’s a bad thing…

What a joke reply.

2 Likes

Always pleased to follow a healthy conversation :slight_smile:

Answering your key points:

  1. The proposal does not solve the underlying problem of the protocol. It would be great to fix (for proper discussion purposes) what kind of problem you are referring to because I think the point of view may be different depending on the exact problem formulation. I assume that the problem is the liquidity drain of USTD/C markets and as a result disabled borrowing. From the moment when these problems arise, the team indeed lowered the maximum percentage, just like you said, and that was the first step. At that time it was also not obvious how that move would help the protocol because it seemed like it is not going to solve the problem. After that, the team made a series of proposals (adaptive limits, deposit locking, debt assumption by Sasha, maybe something else that I forgot) that indeed helped to partly deal with the situation (i can claim my vires rewards every day without any problem, I can withdraw my very modest supply without any problem), and now it is clear to me that the first proposal that lowered the percentage was just to win some time to work on the actual solution. Apparently, the time won is not enough and now the team needs to win a little more time to finish working on other proposals that would help the protocol
  2. 130% and 20% have the same risks in this case. And smart investors assess risk first.. Unfortunately, I didn’t fully understand the risks you are talking about, and i don’t understand how the proposal may result in losing 80% of the deposits. Most of the locked Vires are unlocked only in 8 months. If the vires holders decide that they want to quit now they will be quitting in the next 8 months. During that time I’m sure the team will make new proposals aimed at actually stabilizing and fixing the situation and making the protocol healthier, which will increase the token value and other investors will be buying these tokens that those who lost the trust started to sell. That is the other reason why i don’t see the vires price dropping that much, in addition to the fact that they are not rising the proposal creation limit.

It would be interesting to calculate though how much gVires can be unclocked daily and how much (in best and worst case scenarios) will be loaded to the DEX daily, that would indeed give a piece of valuable information regarding the risks. I checked data from the smart contract and calculated the daily unclock using the following code:

const response = await fetch('https://nodes.wavesexplorer.com/addresses/data/3PHvU5KXYJUAReeActQpS56TCdF8gupEjdR')
const data = await response.json()
const unlockedDaily = data.filter(x => x.key.endsWith('_vires')).map(x => (x.value / 100000000) - ((x.value / 100000000) * Math.exp(-(Math.log(2)/180/1440)*(1440)))).reduce((acc, x) => acc + x, 0)

Which resulted in around 1500 vires unclocked every day from 5646 accounts. There are accounts with huge amount of vires which have a ton of vires unlocked every day, and there are small ones. To give you a better picture, from these 1500 unlocked every day, if we take TOP N from the “unlockedDaily” sorted in reverse order, then we will get:

I may guess that TOP 10 or even TOP 20 are accounted of the team, so we have 840 vires unlocked every day. Now it is up to you to decide how many will decide to sell their tokens every day if the proposal will pass. I have absolutely no idea which percentage will decide to do so, but we may take 10%, which is 84 vires. Sounds like not a lot but it may definitely put pressure on the vires price, but i dont think too much,