Vires Finance Plan: Updates - Discussion Piece

The Situation

Vire users should understand that full repayment in USDN continues to be the number 1 priority for the team, and all actions are taken in pursuit of that goal.

The approval of VIP-028 meant that all Vires users have 2 options:

  • Choose to receive a guaranteed repayment in USDN directly via vesting with the goal of full repayment with 365 days.
  • Stay in the legacy markets with 2% APY, with repayments not guaranteed.

Subsequently, SURF the neutrino recapitalization token was added as an additional withdrawal option, giving users a route to profit from the recapitalization of USDN. However, due to instability of the USDN peg, vesting had to be paused to avoid the loss of all the user funds.

The Vires Team realize in deciding to pause vesting, they have become a centralized intermediary going against the values of the project. This is the anti-thesis of what the Vires Team wants to achieve. As a result, the team is proposing to update the plan to create a decentralized system that doesn’t need Vires team intervention.

The Proposal

Here is what we propose, as always, for community discussion prior to official proposal:

  1. Create new Vires markets for USDT and USDC, to give new and existing users access to the Vires incentives system, rebuild TVL, and re-establish gVires token rewards.
  2. Vires Team will stake all the USDN in vesting, and Neutrino will initiate proposal to redirect 95% of native WAVES staking rewards to USDN staking (would result in ~10% APY.)
  3. Enable adaptive vesting, to decentralize the vesting process and stop team intervention. All legacy LPs can withdraw USDN according to it.
  4. The Vires team will negotiate with several whale accounts, providing attractive terms to support the adaptive vesting process and help stabilize the peg.

1.Creating new markets

  • What does this do: Adds new USDC/T markets to Vires Finance, unaffected by the bad debt in legacy markets.
  • Why is it important: To give users the ability to return to the platform. Currently with markets locked there is no way to benefit from Vires Finance and it is not attractive to investors.
  • How will it affect you: For Vires token holders, protocol revenue will be directed to you in rewards. For legacy LPs the affect will be small, but will provide an avenue for users to reinvest should they want to. For new users it means you can deposit USDC and USDT into the platform to earn rewards for providing liquidity.

2.Redirect native staking rewards

  • What does this do: Stakes all the USDN deposited into the vesting contract, and redirects staking rewards proportionally to each user’s vesting balance.
  • Why is it important: To give users a sustainable reward directly from the consensus layer.
  • How will it affect you: If you’re a legacy LP, you’ll earn a staking reward for all the USDN you choose to vest. It will be paid daily and will be withdrawable.

3.Enable adaptive vesting

  • What does this do: If average USDN price for the last 3 days is above 0.98 vesting is enabled, starting at 50k total per day it improves by 50k per day, while price remains above 0.98. If market price drops below 0.95 it stops, with a 3 day minimum timeout and resets the daily total to 50k, once reactivated.
  • Why is it important: It creates a decentralized vesting system that is not dependent on the team. It aligns the incentives of all USDN holders to WAIT for USDN demand before selling. Everyone is incentivized to maintain the peg stability in order to improve repayment size per day, and avoid a reset in daily amount.
  • How will it affect you: If you’re a legacy LP you will receive your vesting amount depending on the above conditions.

4.Negotiate terms with whales

  • What does this do: Introduces external support of the peg, and therefore speeds up vesting for all users.
  • Why is it important: Vires platform would still be working, if it weren’t for overleveraged borrowers and their bad debt, now with un-borrowable collateral and adaptive withdrawal/borrow limits the systems are there to stop this from occurring again. However, a large amount of capital is needed to unlock the situation and fully reset. With several large investors in the platform with a vested interest in full repayment, the Vires team will seek their support to create demand for USDN and as a result stabilize the peg. With 5m daily demand for USDN every user could be out in as little as 60 days.
  • How will it affect you: Should a deal be made it will mean more demand for USDN meaning more freedom to exchange and less time stuck in vesting.

If the proposal is accepted, your options would be:

  1. Choose USDN Vesting - you’ll receive APY from USDN staking (would be ~10% APY) and be able to withdraw based on the adaptive vesting measures.
  2. Choose SURF - you’ll receive your full vesting balance in SURF and can profit form USDN’ return to a fully back stablecoin. (Part withdrawal in SURF is also coming soon)
  3. Export your LP token and take the market price on Waves Exchange
  4. Do nothing. Stay in the legacy markets and wait for USDT/C repayments however it should be clear that this is the very last priority and won’t happen until there is sufficient demand to warrant the dangers of exchanging large amounts of USDN to USDT/USDC.

As an apparent whale with a very large sum of USDC tied up I don’t see it as a prudent move to exchange for USDN. And SURF is even more speculative. I chose to invest initially with USDC as it is backed by fiat and not algorithmic. Pure common sense investing except getting tied up here. Why would any sane individual take the USDC to USDN swap? Makes no sense. On top of the fact that the withdrawals are a measly $500/day as well as I would have to fight/beg to even get that with more tech-savvy users using bots to hog up all the daily limits. This is robbery.


another short sighted proposal benefitting Sasha alone, great.