I tend to agree with the general sentiment. Instead of decreasing the other pools’ alloc_points in order to move more incentives to cLUNA, I’d rather see the cLUNA-LUNA pool receive somewhere close to the same ASTRO allocation as LUNAx and bLUNA.
An initial alloc_points of 6666 for cLUNA-LUNA is fair. The allocation can then be reassessed after 8 weeks together with all the other pools.
Hi @Fluffy_trex , in regards to your question of what will Prism bring to Terra2 other than cLUNA/LUNA in Astroport, is utility. As mentioned in the previous Prism articles, Prism will be bringing in fixed term maturities p/yLUNA, and this in itself builds up utility for cLUNA without the need to depend on lending or stablecoin protocols to create utility for it.
In my opinion, fixed maturities have far higher utility over the lending/stablecoin protocols in the bear market, as you’ll be able to use them as a hedge, unlocking equity in L1 holdings, or accessing future yield at a discount. These are just some of the example use cases, and these creates a large utility for cLUNA from the get-go without depending on other protocols. These utilities will benefit heavily the Astroport trading volumes as the utility grows.
With regards to your comment on bLUNA, theoretically, you could say that bLUNA has dual incentives since 70% of the bLUNA performance fees are routed to the LP, and 30% are retained and given to Skeleton Punks (holders of 3 or more Skeleton Punks). I did some calculation in the previous post for that, and it wouldn’t attract much liquidity due to its low fee structure.
We recently published our introduction to v2 → Prism v2 — Allow us to reintroduce ourselves | by PRISM | Dec, 2022 | Medium
We wanted to elaborate on the symbiotic nature of Terra and Prism’s new blockchain.
There are several ways to bring value to a chain or protocol. For successful protocols the utility and composability benefits can be far higher than just simple gas fees for the native token. The benefits Prism can bring to Terra holders are significantly higher than a traditional dAPP, such as v1, could do on Terra classic.
There are many synergies and benefits Prism can bring to Terra 2. Some of these are highlighted below
AIRDROP - In order to align communities we have proposed an airdrop to (1) Luna holders who wish to actively receive it (they can delegate to Prism Protocol validator or mint cLUNA) and (2) an airdrop to Astroport liquidity providers which Astroport Governance can choose to activate (by adding incentives to the cLUNA-LUNA liquidity pool). Read more on the airdrop here → The Prism Airdrop. 2022 has been a brutal year for… | by PRISM | Nov, 2022 | Medium
UTILITY - Refracting assets will create significant utility for LUNA. We saw the success of this in v1 and v2 brings increased functionality. We expect many protocols to build on top of pLUNA & yLUNA with maturities. Fixed yields are a cornerstone of TradFi and enabling this primitive in DeFi could have meaningful implications. Read more about the need for “Fixed Yield and Composability” in the v2 introduction.
ARBITRAGE - Prism v1 consistently had >30% APR on liquidity pools that were unincentivized because of the natural arbitrage flows between LUNA <> cLUNA <> yLUNA <> pLUNA. This same phenomenon will exist in v2 and could generate a lot of volume and swap fees for pools on Terra where these assets trade. As buyers and sellers move the relative prices of these assets, arbitragers will normalise the prices by using swaps, bridging, refracting and redeeming - all of which generate fees.
NETWORK FEES ON TERRA - As mentioned in our medium article, Prism will aim to give users a “Terra native” experience where they can obtain the benefits of using Prism without leaving their Terra outpost. Swap, Stake, Claim yield & Refract. All of these when done from Terra will generate network fees on Terra.
cLUNA AS POS ASSET - Prism v2 intends to use cLUNA and pLUNA to secure the blockchain. The exact implementation will be finalised in due course, but an example of how this could work can be found in the Terra Alliance documentation. This will bring an exciting new utility to LUNA and cLUNA as it secures other assets.
Since we are being referenced, it should also be noted that we are also focused on the NFT market space and not only DEFI. There are many $bLUNA utilities that we have not shared yet.
I guess what the question comes down to is what token are people interested in earning.
30% APY on a governance token
or
A less % on an L1 asset $bLUNA
Both will have a market.
All of the LSDs should have an equal chance in this stage. It is either the same or nothing.
