Whoever will try to copy this model into the ethereum 
good luck to them, at current fee levels of ethereum i doubt it would be profitable even if it had insane high APRs we have on BSC. It would need to be like 1.5x higher apys in individual pools to be somewhat similarly profitable fo AVs.
Welcome to the forum. I feel like you spoke about multiple things that arenāt related to each other so I will do my best to respond to them 1 by 1.
-Belt already deploys into Alpaca last I checked. And they donāt have much TVL anymore. So we donāt need to do anything to attract them, nor would it make much sense to want to
-I think our lending APYs are already among the highest on BNB Chain for a secure and tested protocol
-BTC earns us very little revenue and there is already a lot of unutilized BTC. Getting more BTC TVL would not earn us any more revenue, and it would just build a vanity metric like unutilized TVL. Not useful in isolation.
ALPACA already having a lot of utility isnāt sufficient justification for not giving ALPACA more utility. The question should be, āWill giving access of the limited 8x capacity to outside non-ALPACA investors benefit the protocol and ALPACA holders more?ā
And thatās a clear no to me
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What you just said that anyone can fork our automated vaults is incorrect. Smart contracts are not so black and white. Alpaca AV cannot be forked
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Thanks for your answer, i just try to say that implement entry barriers in a super hyper small niche like this i think is not a good idea (investment > high risk > Crypto > BSC > Lending > LYF, we are a niche inside a niche inside a niche and so on), i give the example because they even step up the game, i do not want this here, but just have no entry barriers will be super fine and will allow us to growth as offer of new vaults meet the demand and finds a stable balance.
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Not having entry barriers means increasing the supply of investment capital relative to the supply of AV capacity. Our current supply of capital is much higher than AV capacity, which can be said to be an inefficiency and an economic problem.
Since we canāt increase capacity in a short time, the solution to achieve a stable balance is actually the opposite of what you suggested. The solution is to decrease the amount of capital by increasing the price of entry(what you call barriers) which also increases the total revenue as a result and comes closer to an ideal balance.
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im ok to every respond that you gave and all is logic
But wonāt 8x vaults borrow more and increase utilization and lending apyās ?
Also, there will be more deposit to 8x than 3x since its more populer
8x vaults reach limit in a hour or so
While 3x reach at 6-7 hours if i remember correctly
I think we can launch 8x vault for only xalpaca holders and for public ones
Locking more alpaca will result down in governance apy and short term price pump
So we are looking for sustainable future, we need to consider long term
Not only short term alpaca ālockā and pumps
for example: Why not create more AVs of BNB-USDT of 15-25M until the use utilization rate of lending capital raise to a level that the APY of lending become relatively high compared to rest of BSC network, so with this higher APY (ex: 8-15% in BNB) more new capital will come to Lend and we can create more AV and so on until supply of AV meets the demand and balance with lending utilization, its possible to do this or not? maybe im not understanding this in the right way, thanks.
you are wrong 8x filled in less than 10 minutes. You dont understand the proposal fully, what they are saying is that we will fill the 8x vault anyway, and there is limited amount that can be deployed at a certain time. Filling those vaults with xAlpaca holders provides higher benefit than filling them without xAlpaca holding. Thats why we should aim for xAlpaca fillings and only if it clears out that xAlpaca holders cant fill 8x vaults with their money they open to public so they are filled. So protocol dont lose any revenue on any fees. Actually increasing value of Alpaca is providing sustainable future, as there are still emissions in place for upcoming months/year. Furthermore, 200milion AV should generate aproximately 12% more rewards for governance vault if you take current locking into consideration. So if dillution due to more locking happens, it should be offseted by those
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the limitation fo AVs, is not just lending capital being available. you are creating dillution in underlying pool itself. If there is 400 million and you put in another 400 million the rewards for each dollar in that pool will be halved., unless the trading volume also doubled which would mean the rewards are same. Thats why it is a limiting factor and should be behind xAlpaca
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Sir you missÅng that pancakeswap has some limits
I cant expain it without giving example cause bad english so;
If Pancake gives 10 cake per block to bnb-usdt farm
And if the tvl is 1M$ And you deposit 500k$ you get 5 cake
And if someone deposits 1M$ more you will get 2,5 cake
So the apy will go down when farms tvl goes up
Thats why we canāt add unlimited vaults
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Good point!, maybe not in Ethereum, but in a cheaper transaction fee networkā¦thanks.
ahhh ok i didnĀ“t know the halved rewards thingā¦that changes everything.
Even with this info, i will benefit xAlpaca holders indirectly by giving more protocol revenue trough more # of AVĀ“s or even upping the % of each AV contribute to xAlpaca, but in no case i will asking to a investor to hold xAlpaca to be have to use full AVĀ“s, this indirect way is more open to new people.
The major bottlenecks on AV are rewards on the DEXes and lending supply(but this can grow). A 3x and 8x vault of 1Mn TVL earn approximately the same revenue for the platform, but the 8x vault uses up much more lending supply, so it reaches the bottleneck faster. As a result, the $ revenue per unit of lending supply is much higher on 3x.
āAlso, there will be more deposit to 8x than 3x since its more populerā
When the problem is too much demand, our first priority is not how to get more deposits which is just more demand.
āSo we are looking for sustainable future, we need to consider long term
Not only short term alpaca ālockā and pumpsā
Thereās no short term Alpaca lock and pumps. Weāre talking about a 1 year lock. Average lock time now is 37 weeks and will obviously increase with this proposal. Compared to how long most people hold positions in DeFi which is usually days or weeks, a year is an eternity.
Regarding ALPACA price, one more thing to keep in mind is there are ALPACA rewards as part of the APY of the AV. If ALPACA price increases, so does the APY of the AV.
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Weāre already going to do that. This proposal will have no significant effect on the target utilization which is 85-90.
You cant up the %, cause that would mean one of two things, either the borrower is paying more % for their borrowed assets (which would diminish APYs) or lenders would receive lower %. Both of those could negatively impact the AVs and protocol overall as its 8x the leverage so 1% actually means 8+%. There is no benefit to not put it behind xAlpaca, and huge benefits to do it. Therefore it should be a no brainer. If the 8x AVs would prove to not be being filled by holders, which i doubt, they will open them to public, so there is no limitation to capital access
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The protocol revenue will get to a peak eventually, regardless of whether the 8x vaults are only for xALPACA holders or if theyāre for anyone. So when it comes to restricting access to 8x to xALPACA holders, there are only benefits and no downsides. Iāve spoken about the various benefits in many posts in this thread.
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First, a question on strategy: Should we should add capacity to the 3x vaults until weāve met demand for them before opening more 8x vaults? A 3x vault has a much higher percentage of the TVL coming in from the user than an 8x vault (33% vs 11%). Therefore 3x vaults are better for the platforms overall TVL and possibly allow for more overall vault space (Please correct me if Iām wrong, but I believe the limitations to expansion on BNB are the funds available for lending and the possible dilution of the farmed pool. A 25m 3x vault borrows 16.67m in funds whereas an 8x vault borrows 21.88m).
After 3x demand has been met, I propose Option#3: Split Between Alpies and Either 1 or 2
I propose we split the capacity to be used on 8x vaults into 2 groups:
Group A. Use option 1 or 2.
Pretty straight forward, use some of the funds in one of the ways described in the original post. This would be decided by a secondary vote.
Group B. Per Alpie owned: limit access to a certain amount of investment per Alpie owned.
Access restriction is a perfect use case for NFTs. If we want Alpies to be as peerless in the NFT space as the AVs are in the financial products space, this access restriction predicament is an absolutely perfect opportunity.
As a personal aside, the move into NFT gaming was the only time Iāve doubted the strategic vision of the Alpaca team. I mean, if itās wildly successful, you now have an enhanced revenue stream and brand awareness but at the cost of increased wariness from anyone skeptical of NFTs and NFT gaming (and there are many at all levels of investment, even within crypto). If itās a middling success, you make back the investment but bear the same downsides. Then thereās the idea of increased leverage for Alpie holders, which sounded great to me at first, but the details seem fraught. If our max leverage and liquidation levels are set for safety (to prevent bad debt or too many liquidations), how does it make sense to reward the most loyal by allowing them to be more likely to get liquidated? Why do I go on about my Alpie doubts, if I want the team to take this idea seriously? Because in spite of these qualms I own three of them. There was a line in one of the medium posts or maybe an old page on the docs that said something like āyou know weāll find utility for them,ā and I really believed it. I still do. This is the perfect chance.
Note 1: The smart contract would associate the Alpie ID(s) with the position when opened, and the address that opened the position would need to own the same Alpies to close the position.
Note 2: Iām not suggesting this so I can access the 8x AVs. I put the amount I wanted to put into an 8x vault about an hour after the first one opened. Iām suggesting this because I want Alpies to be the NFT that shows dogmatic anti-NFT critics what an NFT can do. If we could get some Alpie buzz and have people who read about it find out that for once the rise in price for an NFT collection was due to actual utility: chefās kiss.
Note 3: Most of the vault space assigned to Group A and Group B should be on a āright of first refusalā basis, such that if the capacity is not reached within a certain amount of time, it becomes open to all. Maybe half should be done this way?
Note 4: Iām going to play the game, and I hope itās fun.
āFirst, a question on strategy: Should we should add capacity to the 3x vaults until weāve met demand for them before opening more 8x vaults? A 3x vault has a much higher percentage of the TVL coming in from the user than an 8x vault (33% vs 11%). Therefore 3x vaults are better for the platforms overall TVL and possibly allow for more overall vault space (Please correct me if Iām wrong, but I believe the limitations to expansion on BNB are the funds available for lending and the possible dilution of the farmed pool. A 25m 3x vault borrows 16.67m in funds whereas an 8x vault borrows 21.88m).ā
Correct
āAs a personal aside, the move into NFT gaming was the only time Iāve doubted the strategic vision of the Alpaca team. I mean, if itās wildly successful, you now have an enhanced revenue stream and brand awareness but at the cost of increased wariness from anyone skeptical of NFTs and NFT gaming (and there are many at all levels of investment, even within crypto).ā
The type of people to be skeptical of NFTs and NFT gamingās future are typically not using DeFi. The biggest protocols in DeFi and the biggest tokens in crypto are branded with unicorns, food, and dogsā¦ This space is full of apes so you are simply giving everyone in crypto too much credit here 
By the way, very few people really seem to even understand what NFTs/P2E imply for emerging technologies. Itās like many assume weāre working on an angry birds game that weāre going to host on our lending page. Thatās not it.
Just like how Tesla is not a car company, and is actually a big data and AI company, NFTs and P2E are not games and monkey jpegs, theyāre digital real estate rights and smart-contract-bound incentivization systems which are the necessary building blocks for allowing individuals and companies to invest in, create, and work in the shared digital economies and worlds that donāt even exist yet.
Thatās the industry weāre expanding into.
In 13th century Scotland, one guy handed another guy a piece of earth and stone symbolizing the first recorded land transfer of physical property, which became the building block allowing for the investment and development of physical economies and multiple industrial revolutions. Iām sure that piece of earth and stone looked just as arbitrary as a pixel jpeg does now.
āIf our max leverage and liquidation levels are set for safety (to prevent bad debt or too many liquidations), how does it make sense to reward the most loyal by allowing them to be more likely to get liquidated?ā
The question itself lacks necessary context. The max leverage is set for safety of the aggregate system. For example, one person having a 10x position for $1000 will not affect the rest of the system, but if everyone has 10x positions then it would.
As for liquidation, if you believe there is positive expected value in investing in an LYF position, or in other words, profitability/liquidation risk is acceptable to you, adding more leverage does not change that; because adding leverage only adds a constant(multiple) to that equation. Thatās why the the pairs on the LYF Farm page are always either suggested at max leverage or no leverage(1x).
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If thereās a limit on the capacity of 8x vault, why not increasing the performance fee and management fee of the 8x vault to lower the return of it. In this way, we can lower the attractiveness of the 8x valut in order to achieve a supply and demand balance while extracting the max profit for the team and alpaca holders.
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