Another suggestion. It’s nothing to do with the more new vaults, I think we should increase the performence fee and management fee of the 8x vault to make the expected sharp ratio similar to 3x vaults.
Generally speaking, we should not make one vault overwhelmingly better than anther vault in term of risk adjusted return ( or sharp ratio). They should all be at a simiar level, whether it’s a 8x, 3x, or 5x in the future. The performance fee and management fee should be the lever to help us to achieve it.
Nonetheless, my point stands. We are rewarding loyalty with the ability to take greater risk. When I say risk, I mean risk of liquidation. If the liquidation threshold doesn’t change, then a smaller price movement can liquidate a higher leverage position.
It seems to me your point supports my suggestion. If the NFTs are about more than hosting a flash game, let’s start giving them utility right here and now. Let’s be the ones to make our marks on the stone mean more than just speculation.
Edit: I deleted and reposted because I thought I forgot to hit reply because it didn’t show as a reply. It still isn’t, but I definitely did it as a reply this time.
i know the feeling happened to me twice today, that my reply wasnt link to a reply i replied it to but then when i opened it from new incognito window i noticed it was linked, so probably some visibility bug
Edit: i guess it happened again, it doesnt show as reply, not even in another window now, but when i edit this comment i can see that it says its reply to yours message metaman0
I’m afraid your point does not stand, friend. I’ll rephrase what I said in another way. Every investment has a risk. It’s about risk:reward ratio. If you like that ratio, you consider it a good investment and invest. Higher leverage does not increase the risk:reward ratio. So if you thought it was a good investment before, it’s now a better investment. If you manage your liquidation risk, it’s the same as automated vaults where 8x>3x. We have no way to remove liquidations from manual leveraged positions and we’re building this feature because people wanted it.
Totally agree with setting the limiting access to Av. Without the threshold, all people will flood to 8X vault, and it will hugely damage the demand of other leverage vault. 3X vault is already excellent enough comparing to other protocols.
This is the key piece of information that I was not aware of, as there’s no mention of this in the docs. I understand the idea now, though, and I’ll concede that it’s feasible.
All of our discussion, however, is really tangential to the merits of my proposal. Moreover, I can think of nothing I said that was as convincing of an argument for my proposal as what you said:
My proposal is a solid step towards the sort of financial future you describe. It would instantly become the most useful NFT I’ve ever heard of. Do you know of any NFT out there with this kind of utility?
I believe I see the system you envision for the future, but many do not. Moreover the space is cluttered. Many projects will never have any utility outside of speculation. So let’s take a step towards making the future you describe. Let us show the market that there are collections with a real purpose. Let the Alpies lead the way.
First, I’ll admit I have not read all the comments yet nor do I have the time to since there are so many, so forgive me if these opinions have been raised already.
Firstly, I believe a dollar value allocation per xAlpaca is more fair for those who have more than 200k xAlpaca already. If this is done on a tier based system, it will simply make a need create additional wallets and capital inefficiency for someone who has let’s say 5,000 xAlpaca but doesn’t have enough capital to reach 20,000.
Secondly, I think this is a great utilization of xAlpaca and will incentivize people to stake more. Coupled with the early withdrawal system, I believe this will lead to a significant increase in Alpaca burns and governance revenue.
Lastly, based on the introduction it sounds like the xAlpaca requirement is for entry, not a continued requirement. If so, I would just like to emphasize how import I believe it is to ensure it operates like this.
It may lessen the short term demand (compared to making the xAlpaca a lasting requirement), but I believe it will create long term scarcity through burns and increased governance vault income which will benefit all long term xAlpaca stakers greatly, since some users might buy and stake just to deposit into AVs, then withdraw (incurring the early withdrawal fee) to sell.
Sir , 8x will bring more income，Av charge 1% management fee，if lending fee 》10%，the lend part will bring more income than your own money.
And as a long term investor I don’t care the short-term price volatility.I only care the protocol income，no matter who use the AV.
we should know the more demand than supply just because your supply can’t fill the demand if you supply more the apr will decrease.And 8x is a product not a welfare.If you think it’s not fair you can charge more.no matter who use AV they create value to the whole ecology.
I think you should supply more and then the apr will drop and balance at critical value.If you limit the supply it’s not the welfare to holders it’s the welfare to who open 8x
You are right that the Sharpe Ratios are similar in the back test. However, that’s before the interest rate model change. Under the current interest rate model, I believe the Sharpe Ratio of 8x vault is much higher than the ratio of the 3x vault.
I don’t understand why changing the fees won’t bring them closer to each other. What I mean is changing the fees individually for different leveraged vaults. 8x can have a much higher fee that the 3x. Then we can move the Sharpe Ratios closer to each other.
Lastly, based on the introduction it sounds like the xAlpaca requirement is for entry, not a continued requirement. If so, I would just like to emphasize how import I believe it is to ensure it operates like this.
It’s not a hard requirement, but it incentives long-term staking. If a user wants to deposit 1k, he’ll need to lock 2k alpaca for a year or 104k for a week. Taking swapping fees into account, purchasing alpaca for the x8 vault and holding it for only a week is just not profitable
The proposal reads…$200m remaining for vaults estimated.
2 Xalpaca = $1 allocation.
Assume half are 8x vaults and require Xalpaca as per proposal. Ie $100m
Therefore 200m xalpaca are required for $100m entry into vaults.
There aren’t enough alpaca?
For $200m to be entered into the vault, we would need 400m alpaca = not possible
for $100m to be entered into the vault we would need 200m alpaca = not possible also
Personally, I would prefer the linear option:
+ Gives smaller holders an incentive to hold (<1k)
+ Gives users in between tiers are reason to increase their stake.
For example, the gap between silver and gold is enormous, if a user is just in it for AVs and Gold is unattainable there is no reason to go beyond 20k.
- Removes the psychological “need” to reach the next tier
- no upper limit
Maybe it’s an option to combine it?
have it 2 xaplaca per USD, with an additional benefit: tiered vault NFTs (fallout themed? :p) and/or a small increase in allocation (1-3%) per tier reached
Can you clarify what you mean by max 200M TVL?
Total TVL includes the borrowed assets or it’s just for position value?
Also is it only for BNB-USDT pool or does it consider also the BNB-BUSD pool and possibly the ETH/BNB pools?
It would be nice to have a list of the possible coexisting pools, eg:
8 x BNB-USDT 3x pools
4 x BNB-USDT 8x pools
5 x BNB-BUSD 3x pools
2 x BNB-BUSD 3x pools
3 x ETH-USDC 3x pools
1 x ETH-USDC 8x pool
3 x BTCB-USDT 3x pools
1 x BTCB-USDT 8x pool
etc.
There definitely needs to be limitation somehow as there is only $200m remaining, but I think turning a delta neural vault - one where there is no risk (minimal?) into a vault where there is now risk by adding the volatility and risk of the xalpaca into the equation takes it in the wrong direction. Potential greater exposure to alpaca vs $ entry into delta neutral vault changes the whole game.
Can’t really call it a delta neutral vault when also forced to hold a fairly risky asset in tandem.
Potential greater exposure to alpaca vs $ entry into delta neutral vault changes the whole game.
There are still the 3x and 5x(?) vaults, so limiting the access to 8x is not changing the whole game. 8x VAs will be filled, now we are just prioritizing those who stake
happened to me twice today, that my reply wasnt link to a reply i replied it to 