[For Discussion] Unifying stablecoin lending pools

The idea is to create a single pool for stablecoins so that the AV and any type of Farm can borrow them at a stabler (and possibly lower) rates, independent of the stablecoin being paired (since they could just be exchanged for other stablecoins).

It will give higher rewards for less used (in BSC) stablecoins like UST and bring in more capital from other chains that pay less for borrowing such assets.

This will also create more demand for such stablecoins LP in pancake or other protocols and as such increase TVL for such stablecoins.

1 Like

no one will lend money on this low apr pool right?

The idea is to increase rewards for USDC and UST to bring more lenders for those stables
USDT and BUSD will still be the most used coins and will keep the usage more consistent, and will open the possibility to use pools with better rewards (like BNB-USDT instead of BNB-BUSD) with higher rewards, and keep the lenders reward the same.

Thanks for the suggestions. However, there are many considerations and technical challenges that need to be thought and work through for a pool like this to happen. This is not our core feature, and I don’t think the benefit is enough to worth consideration at this time.

Some of the challenges of the top of my head, if we were to consider this:

1.) Extra swap fees when opening / closing positions

2.) Valuing each stable coin and how to deal with de-peg

3.) Share value calculation when value of each coin is off-balance (would need similar logic to Curve)

4.) Logic and business rules to determine which coin to borrow and return (i.e., liquidity routing)

5.) New debt calculation logic

the list goes on…


Maybe this will lead to instability of stablecoins, I don’t think the benefits have become higher, the risks have become a lot higher

Couldn’t we use merged stablecoin pools as collateral like 3EPS from ellipsis?
I don’t know if there are good pools using it tho

Just some ideas to mitigate

  1. There isn’t much that can be done here if we need to exchange coins with a partner
  2. We can partner with Nexus or InsurAce for such risk, or make a take some of the profits from lending to insure such cases
  3. We could simply exchange the needed coin with Elipsis or something like that
  4. Same as 3, just choose the coin and exchange it with a partner
  5. The debt calculation can be indexed to the stablecoin of the pair, just the lending pool would be changed… I don’t really see a difference in implementation

A “simple” solution would be to create a pool that functions as a wrapper around the existing stablecoin pools and simple rebalance it occasionally to equalize the utility.

E.g., Is busd utilization significantly higher than the other pools (within a certain timeframe)?

→ automatically withdraw funds from the other pools
→ convert to busd via elipsis/…
→ redeposit into busd pool

The only problem is the swap fees; although they are small (0.03%) compared to the daily earnings (0.01%), it’s a high cost for a potentially small increase in the long run. So the usefulness is a bit questionable