Status: APP-003 passed by community.
Preliminary Community Review and Voting Schedule:
- Idea discussion and comments: Complete
- AmpleSense Progress Proposal Publication and Governance Vote:
Idea summary: Yield.Credit is a lending application that will be the first platform to offer Ample lending and borrowing.
Yield is unique because it provides incentivized, individualized lending and borrowing for all assets available on the platform, including Ample. Other key features include:
- Each loan is made between a specific lender and borrower, meaning that, unlike Compound and Aave, lent assets are not pooled and are provided to individual lenders.
- Interest on each loan is fixed and guaranteed.
- Borrowers are incentivized to take loans. After loans are repaid they receive the YLD token in return. YLD has a dynamic supply and all fees generated by the platform are used to burn YLD on the market, which may increase the value of the token long-term.
Making Yield Even Better: Automated Loan Management, Higher Loan Maximums for Ample Lenders and Borrowers
As acknowledged by @Coiner, Ampleforth adviser and developer of the Yield platform, lending and borrowing on Yield may have some limitations for some. First, users must actively manage loans. Lenders search for loans to service, and borrowers put in requests and wait for lenders to fill them.
While this provides lenders and borrowers with full control, some potential Yield users holding Ample may want a more automated process. This means simply depositing funds for others to borrow and being able to request an Ample loan and having it instantly filled, rather than waiting for lenders to fill the loan request.
A second consideration for some Yield users may be the borrowing limit. At launch, lenders and borrowers will be able to manage individual Ample loans with a maximum amount of $50,000. As those familiar with decentralized lending and borrowing know, it is common for people to take loans of much higher amounts to pursue short- or long-term crypto opportunities. Providing higher loan maximums will help users unlock more benefits from Ample loans provided via Yield.
Having an automated Ample lending and borrowing process would deliver many benefits and help make Yield an even more desirable and useful platform for the Ampleforth community.
Idea implementation/execution: After multiple discussions with Coiner, we believe it would be beneficial for the DAO to develop a smart contract and interface (housed on our upcoming elastic finance-focused site) that:
- Automates lending and borrowing specifically for Ample on Yield: This means that lenders will be able to deposit Ample into a shared pool of tokens that would be used to fill loan requests. (The DAO’s application would not initially used for other crypto assets.) The application would automatically manage their funds, and deliver interest to lenders. Borrowers would benefit from being able to receive loans without submitting separate loan requests.
- Increases the borrowing limit: Borrowers would borrow and manage Ample loans on Yield via the DAO-produced interface. Borrowers would be able to take out Ample loans for more than $50,000 via the platform.
Developing an automated lending and borrowing application integrated with Yield would have the following benefits for the DAO:
- The DAO would generate fee income from the application: Fee revenue would be deposited into the Pioneer Fund and DAO Treasury, helping to support DAO operations and benefiting the DAO’s community. For example, fee revenue could be generated from taking a percentage of Ample interest earned by lenders in exchange for automating the lending and borrowing process.
- The lending platform could accelerate the DAO’s elastic vault strategies: For example, community members could borrow Ample for deposit into our upcoming elastic vault or other vault strategies could be created leveraging the lending and borrowing functionality.
We have been in discussions with Coiner about the technical requirements to develop the vault and examined the functionality of the existing beta Yield product. Developing the automated lending and borrowing system is feasible, and would result in gas savings and other efficiencies for Yield users from the Ampleforth community.
Budget/cost: Funding for this project would come from the DAO’s Treasury. An audit of lending-related smart contracts may be necessary. The DAO would also devote resources toward front-end development and marketing. We would like to allocate a maximum budget of $20,000 from the DAO Treasury for this initiative.
Examples of similar ideas: Automated lending and borrowing would function similarly to applications developed by Aave and Compound.
Idea Timeline: We estimate the lending and borrowing application would take 1 – 1.5 months for implementation, review and launch. We would use the existing front end infrastructure we developed for our upcoming elastic vault platform to accelerate development. We would also collaborate with Coiner on any technical issues associated with platform development.