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Stakedllc / robo-advisor-yield

The Robo-Advisor for Yield
https://staking.staked.us/ray
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Jare's Proposal Five for Yield Generating Opportunity: add borrowing to the existing + future DeFi Aggregated Smart Contract Interfaces #7

Open staccDOTsol opened 4 years ago

staccDOTsol commented 4 years ago

Why

Half of DeFi's business on compound, fulcrum, and etc. is through borrowing instead of just lending. Most of these will continue to give out % growth on collateralized funds. Allowing borrowing would complicate matters, but draw in people and money that doesn't exist on RAY right now.

Solution

On a 'manage RAY' there might be an option to borrow against that RAY, which may involve rebalancing to get the optimum rates.

Considerations

Now, RAYs might liquidate or otherwise lose value over time. This may be contrary to the point of RAYs. Conversationally, Borrow Vs Lend RAYs could be two separate objects, and Borrows could have the same valueadd by paying down the balance on one DeFi and re-borrowing on another when rates become preferable. RAY could take a % on top of the interest, vs the compound (or other) baseline.

Additional Info

This availability should be there for most DeFis.

dpurhar27 commented 4 years ago

Hey @DunnCreativeSS, interesting thoughts, we've been thinking about some similar features.

I think I see two ideas here.

  1. Enable borrowing against current RAY deposits
  2. Create a new type of RAY which optimizes borrowing rates, ie. shifts to the lowest borrowing rate platform

For 1. - As you pointed out, we would be carrying liquidation risk, etc. I think the general idea is we build a borrowing platform on top of other protocols, using our current deposits borrowing capacity. I think this is interesting, and we've been thinking about a similar idea internally. I think for this to work, it needs to add a service to attract users to borrow from us, instead of directly from different platforms (ie. optimize borrow rates as you suggested). We'll be sharing an idea for a service that leverages our borrowing capacity soon. Also, consider we'd need to offer fairly high borrow rates to match the highest lending rates we could be earning, so we generally never be the lowest borrow rates in the market.

For 2. - This may be something we further explore in the future to expand RAY's services (service both sides of the market), but for the near future, we're going to focus on optimizing users yield generation. It would be interesting to optimize both sides of the market and reach close to an equilibrium, though to do so we'd need to control most variables.