Five new tokens to add (October 2020)

Financial parameters
#1

Alright everyone, I would like to kick off a discussion here about what five tokens we should aim to add to @PercentFinance by the end of October. For now, we are limiting the scope to tokens currently on this list of price feeds available to us from Chainlink:

We are talking to the Chainlink team about adding new price feeds for future tokens, so if you don’t see the token you want on there, don’t worry. Hopefully we will have the ability to list it over the coming months.

I want to suggest three tokens that I think would be smart additions to make out of the five for October: sUSD, LRC, and MANA.

  1. Maker is increasingly seeing DAI collateral become trusted assets like USDC as opposed to trustless assets like ETH:

To me, this means there will be a competition over the next 6 months with respect to who fills in the market share for a completely trustless stablecoin. Dai isn’t going anywhere, but many people will want a stablecoin that is completely censorship resistant, and my bet is that Synthetix wins this market. They are shipping like crazy, have a real layer two plan with Optimism, and sUSD is only backed by the trustless SNX token.

Aave has sUSD listed, and if people follow Aave, they will have seen how sUSD spikes in lending to aggressive levels like often over 20% to pay for borrowing it. Clearly someone finds use there already and I think that interest will only grow, so us adding this would be a smart way to pick up on that interest.

  1. Loopring is increasingly becoming essential infrastructure on Ethereum. See below for a cool project built on top of it:

The LRC token also recently became permissible collateral in Maker’s system. It has a community, but no places I am aware of for borrowing and lending. Easy win there for us.

  1. I have made the case at length that we should position ourselves well to capture the growth of the NFT space. Decentraland is a good proxy to this. They have an active community and we could likely get some good coverage from having their MANA token on Percent. This is a good play because the Decentraland community has a different user base than normal DeFi, so we have the potential to pick up a different set of users.

Additionally, it could be interesting to list COMP, which ironically doesn’t have a money market supporting it; KNC or MKR to make a more expansive step into the DeFi token community; and sDEFI (which is a basket of DeFi tokens and would double down on our relationship to Synthetix). But I digress.

Over to you all!

Security review of new tokens
#2

COMP happens to be supported on CREAM.
I think those are good suggestions I would add KNC and MKR to make it five.
I am extremely pleasantly surprised with the liquidity we managed to attract for phase 2 but as we know the incentives are going to drop drastically for phase 3. It is crucial that we manage to stay appealing to lenders at that time. In order to do that I would also like to update the following collateral ratios:
SNX -> 50%
YFI -> 50%
In general I think we carry less risk than bigger platform during liquidation events because we need less market liquidity to liquidate an undercollateralized position (which ironically we can source from our competitors through flash loans), as a consequence I think we should aim to provide the collateral ratio 5% above our competitors.

2 Likes
#3

+1 for sUSD. I’ve seen the borrow interest spikes you refer to and it also gets critically low in the curve pool at those times. Definitely a good stable coin to be lending out. Also, Cream currently doesn’t list it.

+1 for COMP. I’ve seen borrow rates for that spike at Cream too. In fact Cream had a liquidity crunch for COMP in the early days and had to adjust their interest rate model. Something to bear in mind.

#4

Would be happy with all the suggestions made so far. Personal picks would:

sUSD for reasons already mentioned
LRC large and not supported elsewhere
MKR only available on Aave, not super high borrow demand atm, but a defi og
LEND has strong supply&borrow on cream
COMP only available on cream. hat tip to the protocol we are benefiting from.

Is there a specific reason for limiting to 5? I’ve selected core defi holdings because in my mind that makes the platform useful and thus enticing to more people who would likely take advantage of it. It separates somewhat from the selection cream seems to have taken, adding tokens based back-channel “partnerships”, etc. It sets a more serious tone which I think extends the selection that percent started with well, while also being more aggresive than the conservative approach compound is taking. This is critical, in my mind, to be more aggresive to differentiate from compound, and trustworthy & community oriented to differentiate from cream.

Also +1 to @brisket suggestion to bump SNX and YFI collateral ratios.

Edited. replaced LINK with LRC

#5

I’d like to +1 the idea of going for more than 5 assets in this next round. Here are my choices, first the blue chips:

Token Reasoning
AAVE As soon as it is included in the Chainlink feed
COMP Nod to our originator
MKR Again as a nod

Synthetix: I am a massive fan of Synthetix and I think it is a great idea to add both sUSD, for the same reasons other people have stated, and sDEFI, as it will be a differentiator.

Token Reasoning
sUSD Agree with above commenters
sDEFI No one else is doing it, and it makes perfect sense

And then the smaller tokens, in order of preference:

Token Reasoning
LRC Great website, great community
REN Could well be a defi powerhouse
MANA +1 Clive’s suggestion
KNC Another community we can tap into
BNT Same basket as KNC

If I had to narrow it down to 5, losing AAVE since it is not yet available, it would be:
COMP, sUSD, sDEFI, LRC, REN

2 Likes
Stablecoins are the center of the universe
#6

(Reposting from the Discord on 9/22. I updated UNI and CRV which were recently added by Chainlink.)

I browsed the current set of Chainlink feeds available from https://market.link/search/feeds

Chainlink ERC20 feeds vs USD:
ADX BNB BNT BNT COMP DAI ETH KNC LEND LINK OXT REN sDEFI SNX SXP USDC USDT

Chainlink ERC20 feeds vs ETH:
BAT BUSD BZRX CRO CRV DAI ENJ FTM KNC LEND LINK LRC MANA MKR
NMR REN REP SNX SUSD TUSD UNI USDC USDT WOM YFI ZRX

This is the set of ERC20 tokens that could immediately be supported as markets
on Percent. In addition, you could add BTC wrappers like WBTC if you are
willing to use a real BTC price feed for the wrapped asset.

Some Cream assets that aren’t listed:
BAL CREAM FTT MTA SRM SUSHI yCRV

1 Like
#7

(General thoughts I posted 9/26 in the Discord)

Here are some criteria to consider when deciding between tokens:

  • large market cap (plenty of liquidity available, high exchange volumes, widely used as collateral). Examples: USDT, LINK.
  • popular in DeFi protocols (more opportunities for composibility and integrations). Examples: DAI.
  • large and motivated user community (good organic marketing and grassroots usage). Examples: LINK, SNX, YFI, LEND, LRC, REN.
  • distinctive project category, e.g., NFTs. Examples: MANA, RARI.
  • trendiness (to capitalize on buzz). Example: YFI.
1 Like
#8

TUSD has strong usage on Aave which is the only other market it’s available on. Could syphon some of that?

CRV, imo, will find a bottom at some point. In the meantime offering it always had high utilization on cream so is a good earner (and not available elsewhere). I think it would be a good addition.

UNI also is set to be a DeFi bellwether and has high utilization on cream. Support it being added, too.

#9

Ok, all of these suggestions are great. Thank you all for the feedback! I hope to see Percent add all of these tokens in the future with the heuristic being legitimate projects with loyal communities/active users. We may be able to add more that 5, but for now lets stick with that number since we have a lot of things to do this month to get our house in order!

From what I can see @PercentFinance there is rough consensus on including:

sUSD, LRC, MKR, COMP, and KNC

On deck/runners up: MANA, TUSD, sDEFI, REN

#10

I think it makes sense as a high yielding stable coin some of the USDT crowd are switching to. Cream already has it as well.

#11

If there no technical or functional limitations to add more than five tokens, assuming they are in the Chainlink price feed, I 'd suggest we try to make a comprehensive list and get more listed.

The reason I am saying this, is that we are yet starting and having a good variety of good tokens in market would give us competitive advantage, and by having more listed now, would mean we have less to care about for the next say 1-2 months.

Assuming the markets get stable in terms of new tokens with added-value, from a technical side, i.e. @PercentFinance adding more and more in short time frames, is time and effort consuming, but on the other side would seem like we just want to list for the sake of listing.

Thoughts?

2 Likes
#12

I agree.

On the subject of reserve factors for them - we should maybe consider slightly higher ones for the new tokens that are unique to Percent

#13

Apart from all the mentioned tokens above, I would like to emphasize that we can focus on tokens that has:

  1. Not listed on our competitors: Aave + Comp + Cream.
  2. A community that we can reach out and bring potential users to our platform.

By doing so, we can add more utility and possibly value to their token, and create a connection/partnership with their community.

Following that I would focus on these tokens:

LRC (not listed on any competitor)
MKR (only listed on Aave)
COMP (only Cream)
ENJ (only Aave)
sUSD (only Aave)

After deciding on which tokens to be added on our platform, we can get in touch with all the communities of tokens that are listed on percent.finance by sharing the workload among volunteers/mods. I will be happy to volunteer.

1 Like
#14

I’d suggest selecting as many as you want. Then we could decide what cutoff to have (5 or more?) and use the top selections. Alternatively, add all selections to the poll in order of votes and vote on what how many tokens to choose for the cutoff. Or maybe there’s a cleverer way to do this that incorporates the LP weighted vote in what the options should be.

(I have left out RARI as that doesn’t seem to be an option if limited to the chainlink feeds.)

Choose tokens (select all you would like added in this round)
  • BNT
  • BUSD
  • COMP
  • CRV
  • ENJ
  • KNC
  • LEND
  • LRC
  • MANA
  • MKR
  • REN
  • sDEFI
  • sUSD
  • TUSD
  • UNI

0 voters

1 Like
Phase III rewards distribution proposals
Stablecoins are the center of the universe
Phase III rewards distribution proposals
#15

Any chance you can add balancer to this list, yield farmers are huge on borrowing balancers but don’t really want to own them. I think cream offers it, but already at ridiculous APYs, caveat I didnt see a chainlink price feed for balancer.

Next a radical idea, but maybe for some other time veCRV using chainlink price food for regular CRV/4. I feel like curve farmers might go nuts over this. I have an okay amount of veCRV but its pretty useless right now because I dont farm on curve anymore. So it would be great if could borrow something more useful, whereas for someone who is interested in farming on curve would find it invaluable to not have to lock their CRV for 4 years. Instead borrow veVRV and return after farming.

#16

I restricted the poll to only tokens available as chainlink feeds which BAL doesn’t seem to be at the moment. If the chainlink feeds are not a hard limitation for adding in this round then we should do another poll as that might change other peoples votes too. I agree that BAL would eventually be a good addition.

#17

Next a radical idea, but maybe for some other time veCRV

I don’t think this works unfortunately as veCRV is non-transferrable. I had the same idea but for stkAAVE, but same problem there.

#18

@Spartacus the Chainlink list is what we are limited to at the moment, but I’ve reached out to the team, requested a few tokens, and they are currently doing there due diligence on making those additions. From now on, we can reach out to them to add more tokens, so maybe after this current vote we can hold another vote on the non-list tokens we want to get into their pipeline for making new feeds. I agree with @ak47, BAL would make sense there.

1 Like
#19

Hey guys, slightly off-topic, but something to consider when listing tokens other MMs don’t have (especially with smaller float):

Screenshot 2020-10-08 at 23.52.04
Screenshot 2020-10-08 at 23.52.041168×892 180 KB

I’m the one who voted in sDEFI for example - because i think it would be cool to incorporate the community of its holders (and shorters for that matter), but just got reminded of this ^ thread that even if your market is large enough to absorb the risk of one fairly obscure asset (initially), if there’s no other markets and the asset grows, this could pose systemic risks eventually, just like what is happening with Cream and FTT. would need to think deeper about it as well - these are just preliminary thoughts…

#20

I would say that the risk is relatively small in the Cream/FTT case and a bit hyped up for twitter. The poster says it would take a black swan event, a much more likely such event would be just cream itself going under rather than FTT. The risk is much much smaller with sDEFI, which only has a market cap of approximately $1M.