The only reason financially speaking for someone to mint USDN right now is if you are a whale and want to do big swaps or if USDN at curve is at high price, so you can win some money doing arbitrage. Both cases are very rare to occur.
So I think we need to start thinking new ways to make minting USDN attractive, otherwise USDN market cap is going to stagnate.
The easier one right now in my opinion is to lower the fee, by lowering the 2% fee we can make minting more attractive to more people.
The other thing is that there is no option to loan USDN, similar to what is DAI. I see a big attractive reason to mint DAI if I want to stay long at ETH. There is no option to that with WAVES-USDN, if I want to mint USDN Iâm going to lose my Waves. I think there should be an option to mint USDN by loaning Waves, we could use BR at the moment, so for example if BR is 2 we could loan 1 USDN for each $2 dollars worth in Waves. By doing this there is a big attractive to loan waves for USDN when BR is low, which is good because that means USDN is being minted when waves is at low prices.
I donât know. Those are just some ideas. Maybe you can think of other use cases. But we canât stay as now, we had a lot of minting when we got to curve, but I think we are not getting much more from them right now so we should start thinking of new ways so minting USDN become attractive again.
Well, lending is most definitely a use-case we need. I would rather prefer to borrow USDN for Waves, this way i would stay long in Waves and can enjoy USDN yields.
Anyway, i think we should not forget that USDN itself has a use-case and this results from its yields. Actually, it generates quite stable around 8-10% a year. That is not bad at all. Additionally, considering those yields, it creates nice hedging possibilities. Therefore, i think it has (apart from lending) enough use-cases for a stable coin.
Lowering the fees would result in a lower APY for NSBT and i doubt that this is the way we should currently go.
You canât say that by lowering the fees NSBT APY will be lower. Maybe there is more volume to the point where the higher volume compensates the lower fee. Bancor just did that recently, they lowered their fees from 0,3% to 0,1%, guess what, their APY increased because volume increased a lot. Why make a tool that only whales can take advantage from while cutting the majority of waves adresses from taking advantage of it? It seems unwise and unpopular.
About the stake APY 8-10% for USDN, after the boom from Defi, you can get that APY easily using low risk DEFI platforms like AAVE to get that APY on most famous stablecoins, and you can get even better APY if you go to more risky strategies like being a liquid provider and yield farming, even at waves.exchange you can get a much better APY if you stake Tether. So I donât think that apy from staking USDN is a much attractiveness like before
This is only while USDN is âlockedâ in Curve pool. With wide spreading there will be more liquidity hubs with USDN and the volume will come (including swap volume ofc).
OP is proposing lowering the swap fee to make minting USDN more attractive. Often hear that 1 USDN=1$, or 0.995$, but if you only would use the swap function, starting with WAVES the value is 0.975$. (swapping WAVES>USDN and USDN>WAVES)
The slower swap time protects the SC BR against âpump swapsâ. Itâs the opposite of your fast swap proposal.
So use cases: more minting for lower fees, speculation of increased WAVES price after 24 hours.
And why would someone take that risk?
Since you might end up with less money. Since you get less or more usdn
And in the other way your money always stays exact the same amount. Since you would get less or more waves.
Itâs some kind of bet then?
Pump swaps: big trader or market maker, could pump the price, swap WAVES>USDN.
Thatâs why there is a 24 hour swap and fees, to prevent, pump and dump + swaps, which would drain the SC, lower BR. Normal market at the top and bottom, the liquidity is low, but liquidity with swaps is unlimited.
So the higher the fee and/or the longer the time to swap takes, the more difficult to abuse the swaps.
Do you think the big swaps after WAVES pumps are a coincidence?
But by doing that the whale is spending thousands of dollars in fees and locking millions of waves, which will create more buy pressure to waves. Itâs only a pump and dumb if the whale can sell the waves after the pump, but they canât because the waves is locked now.
BTW whales can already do that today if they wanted, 3% pump is pretty easy for a whale, what is preventing them to do that if was that easy as you described?
What they do today is risk management. Thatâs why you see big swaps after big pumps
Of course they wouldnât swap all their waves, the waves they bought to pump, they can sell to dump. The usdn they got, swap back to waves, rinse repeat. Currently with the 2% fee, it isnât that easy, 3% pump isnât enough to make it profitable and you can only do it 1 way realibly, because of the current swap system.
The danger I see with our proposals, while trying to improve, we actually destabilize the system.
The lower the swap fee, the easier to abuse, you are the one proposing for lower fees. I am trying to improve your proposal.
Whale pumping coin (lose a huge amount of money by buying WAVES at a very high average)
Swap some WAVES to USDN (Whale losing money because of fees)
Whale dump WAVES with the rest of WAVES he has (probably still losing money because after a pump the buy order books are usually thin so their average price buy is higher than their average price sell)
Whale swap Waves to USDN (lose more money because of fees)
Now whale has more Waves, but still only going to profit if WAVES goes up by more % than the pump from before to compensate the loss from all the steps before.
So whales are going to profit from it only if they have a really good timing from the market.
On the other hand there will be hundreds of thousands of dollar from the fees to NSBT holders
I donât like your 24h lock propose. Itâs only creating barriers and making things worse and more complicated for the users, they are just going to migrate to other stablecoins with more friendly user steps.