The Algofi Core Developer team will launch an ALGO-BANK Lending Pool and staking contract to the Dex protocol.
To learn about lending pools, see a write up here.
To learn about staking contracts, see a write up here.
There has also been previous discussion of whether BANK emissions should go to STBL2-BANK or ALGO-BANK here.
Proposal
Launch ALGO-BANK Lending Pool and staking contract.
The motivation is to drive ALGO and BANK liquidity on the Dex protocol. The ALGO-BANK Lending Pool would be a capital efficient mechanism for users of the lending protocol and Algofi DEX to earn yield from lending interest and trading fees in the pool, but because of recent precautions explained here, you cannot use the LP tokens as collateral at this time. Additionally, the ALGO-BANK LP would be eligible for BANK emissions.
Liquidity for BANK paired with ALGO is seen as a more attractive pool to earn fees on from an investor’s perspective because the tokens are more correlated and therefore impermanent loss is less of a risk vs. stablecoin-ASA pairs. The STBL2-BANK and ALGO-BANK staking contracts can co-exist. STBL2 should be a center for liquidity on Algofi but we should also let the market decide which pool wins the battle for emissions.
Yes. I think liquidity for STBL2/ALGO and BANK should both be incentivized. Until some kind of smart order router is created that runs all ASA swaps through STBL2 … maybe
so you dont want a Lending Pool? Cause the other proposal says sth about launching a Lending Pool. we should decide now if there should ever be a ALGO-BANK Lending Pool because moving the liquidity from the normal pool to the Lending Pool might be annoying in the future and we would have 2 staking contracts…
Lending Pools are LPs where you lend your assets. doesnt mean it must be possible to supply them + count as collateral. STBL2-BANK is a Lending pool for example
Yes I agree it would be beneficial to have a ALGO-BANK staking contract with emissions. To me BANK, STBL2 and ALGO are the three pillars of AlgoFi.
I believe both ALGO-BANK and STBL2-BANK should receive emissions at a rate of around 4%, with the additional 4% (required for the ALGO-BANK emissions) to be shaved off all the other elements which currently receive emissions, meaning only a very small loss in emissions for each of them.
