onetruekirk.eth

@onetruekirk

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onetruekirk.eth

This is a good point, one thing that may be necessary is to allow first loss capital to protect multiple pools at the same time (this is part of my never-to-be-realized Credit v2 design). I’m not certain what is the right way to implement this with Morpho pools. Maybe, it should be totally independent from the vault curators, and instead insurers would control their own staking contract where they set a take rate as well as which Morpho vault shares are eligible

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Doing it in between the blue pool and the vault is interesting, that could allow for vaults to share the insurance liquidity which is a nice feature, and maybe even for one vault to insure another 🤔

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onetruekirk.eth

Admittedly I am a veToken skeptic. My concerns with that kind of model: 1. Potential abuses by whales. See for example the Humpy attack on Balancer. A large veToken holder can do something like make two bogus tokens that they own the whole supply of, then vote incentives toward this pool, growing their own share of the protocol at the expense of honest voters who try to encourage growth. 2. Difficulty in pricing rewards streams. Since any token will have a volatile price, it can be hard to know how much is the right amount to emit to a given pool, or for LPs, how much they can expect to earn over time. For example on Aerodrome today, it’s common for pools to receive incentives greater than the swap fees

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Idea for how it could work : Create a “peg stability module” where vault shares could be used to mint or redeem a deposit receipt at a fixed exchange rate. Holders of the deposit receipt stake-lock for a bonus share of fees. Vault users can opt in to the insurance pool by minting the deposit receipt. New mints allowed only if no bad debt has been realized (vault share exchange rate has not been modified since insurance pool has been created). If vault takes bad debt, users who opted into insurance and aren’t staked-locked can redeem in the insurance pool.

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onetruekirk.eth

Thinking about the possibility of first loss capital staking on @morpho. Would allow curators to cater to multiple tiers of risk preference in the same vault. An implementation of this would be an interesting subject for a grant

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Joining Morpho Labs As some of you may have guessed from my new profile picture, I've recently joined Morpho Labs as a Protocol Specialist. I've known @paulframbot, @mgd, and @merlinegalite for over two years now, and have a deep respect for the team's strong security commitment and first principles approach. While the Credit Guild shutdown was not the outcome we hoped for, I'm delighted to be able to continue contributing at the cutting edge of DeFi lending. To start, I will lead the design and implementation of decentralized governance for the Morpho DAO, a timely issue now that token transferability is under public discussion. Where possible I will continue my tradition of building in public, and will be sharing background research on governance models and preliminary thoughts on the right solution for @morpho in a series of blog posts.

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/cryptobanking update The Ethereum Credit guild hasn't seen a ton of growth in it's novel approach to lending, but seems to have made a niche for Pendle fixed yield tokens in WETH. ECG combines optimistic governance (anyone can create markets without full quorum), and Curve-like gauges to control debt ceilings.

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Agreed about the risk of a liquidation cascade, my previous comments are in regard to unleveraged holders who are free to sit in the underlying assets like stETH instead of selling if there is a liquidity crunch

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onetruekirk.eth

This means that holders are not obligated to eat a large penalty going from stETH or other LST -> ETH or USD, and it’s not very likely that stETH or other large LSTs suffer a depeg worse than they did before a redemption queue existed at all

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onetruekirk.eth

Redemptions are in kind (stETH or other backing assets) If rates go negative, individual holders must redeem into one of the underlying assets, meaning the risk of holding USDe or using it as collateral is equal to the underlying assets’ price/liquidity risk + custodial risk

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onetruekirk.eth

While we initially planned to simultaneously launch the Credit Guild on mainnet and Arbitrum, leaning towards starting with just the Arbitrum instance for the guarded launch in order to reduce complexity out the gate and focus on showcasing the protocol’s full capabilities in a low gas cost environment

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onetruekirk.eth

The average person among my high school peers is not aware that government debt has increased this much in their lifetimes. Soon, they will be

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Launching the first oracle free lending pool soon, include a Base instance. If there are particular assets you’d like to borrow against, would love to hear from you

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Well said 😆 It’s generally difficult to make a profit on a debt based stable when you incentivize AMM liquidity for the asset in question, since you need an exogenous asset as AMM pair which you aren’t earning any yield on Maker is profitable, and has never incentivized AMM liquidity

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What’s the best crypto native comms platform today? Farcaster is nice for personal social, but channels don’t quite suit the same purpose as Discord or a forum

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onetruekirk.eth

We ended up deciding not to use any such schemes. Value at risk over time is the only credibly neutral way to distribute tokens

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onetruekirk.eth

Agreed that borrowers prefer predictable rates, but will note that a utilization based rate isn’t necessarily predictable either, and may be inadequate to maintain liquidity without governance making adjustments to the curve (see Compound v3 above 99% utilization with ~30% rates)

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onetruekirk.eth

Deeply honored that my article “Incredible Neutrality” was selected for the cover feature, and greatly enjoyed reading the others. Excited to get my physical copy and go touch some grass with it

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onetruekirk.eth

We can start by just offering one or two $k worth of GUILD total for this sort of program, to reward people for learning but not make it worthwhile to make a bot to get around the filters (would have to be able to correctly answer questions in Discord + have a verified telephone number + an address with activity)

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Yeah, upon further reflection I think it’s easier to just give out regular transfer locked GUILD. As long as the total reward amount for this kind of thing is small, their Sybil checks should be strong enough

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