nASTR unbonding issue & clarity of Algem-Sirius Finance nASTR use

Hi, I have one fear regarding stability of nAstr.
I noticed that Sirius finance has Swap for nASTR/ASTR. I swapped 1,50,000nASTR for ASTR easily.
I worry what if people rather than opting for 10day unbonding period just try to swap nASTR for ASTR on Sirius finance in bulk in short period of time, maybe after event on Sirius ends.
It could destabilise the pool there as ASTR are 45% & nASTR is 55% approx in swap pool.
One more thing is when you try using nASTR of Algem on Sirius app the amount of nASTR is reduced to 50% less due to pool dividing your nASTR to make for ASTR.
example, If you stake 1,00,000ASTR on algem get 1,00,000nASTR on serius, the Pool will make your 50,000nASTR to ASTR.
So in jist now you have 50,000nASTR & 50,000ASTR.
for common people nASTR proposal might be misleading as i also thought that nastr quantity wont change.

so, the swap of nASTR & ASTR on sirius might be risk for unbonding 10days time, as it bypasses i guess the penalty, long time for small fees.

And algem must clarify that nAstr will reduce when used in pools of Sirius which is basically saying only 50% of your nASTR can be used in other dApps & not all.

Note: English not my 1st language so apologise if its not clear what i said & will reply in comments. Love ASTR from India :slight_smile:

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Hi @Nishith,

Algem provides liquid staking and the main purpose of nASTR is for use in DEFI.
Indeed you can easily swap nASTR/ASTR via an AMM like Sirus but you will have to pay a fee and assume a slippage.
You can also immediately unstake on Algem but you will have to pay 1% fee and the ustaking pool is limited.

Just keep in mind when you swap nASTR for ASTR in a liquidity pool, the total supply of nASTR doesn’t change, there will be always the same amount of ASTR staked in the dApp Staking.
If a big amount of nASTR is swapped to ASTR, the pool can be unballanced (it could be 65% nASTR / 35% ASTR) and I am sure some persons or bots will do an arbitrage.

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Hi Nishith,

Thank you for sharing your concerns about Algem and let me address them.

Regarding your first point about the ability to swap nASTR to ASTR in the Sirius pool, there are some parameters to consider:

As GuiGou explained, when swapping in the Sirius pool, the user pays fees on his tokens, which is not the case on Algem when using the regular unstaking. It is therefore the user’s choice to accept to pay fees and take the risk of slippage compared to the risk-free but longer of unstaking.

About the stability of the nASTR/ASTR pool, it is true that the pool is currently balanced at a ratio of 45% ASTR & 55% nASTR but if the pool keeps unbalancing, it gives opportunities to arbitrage traders to rebalance the pool. Sirius is also incentivizing with more LP tokens, users who help keep a pool stable by providing the missing asset. In the nASTR/ASTR pool, users providing ASTR to the pool earn more incentives than the one providing only nASTR.

Sirius explains this well in their documentation:

“Sirius Finance mechanism encourages users to deposit or withdraw with a certain ratio of assets which helps with the balance by offering LP token bonus.”

For your 2nd point, it is indeed a particularity of Sirius Finance to be able to provide a single asset in a pool but in this case, Sirius will automatically balance the user’s LP tokens to match those in the pool.

Algem explains this in its documentation about the use of nASTR on Sirius Finance and we strongly advise our users to provide both assets (nASTR & ASTR) in the proportions of the pool to avoid this kind of inconvenience.

https://docs.algem.io/get-started/how-to-use-nastr-on-other-dapps/sirius-finance

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@GuiGou @Gunit Thank you for explaining & clarifying.

The swap pool is now almost 41% Astr/ 58% nAstr. I hope arbitrage occurs soon because the way pool is unbalancing, & extra reward event time coming to end, i fear collapse.
Still optimistic about it improving in future. Thank you for addressing my queries.

As i predicted & shared concern the nAstr/Astr pool is massively imbalanced in Serius Finance and it is now approx. 23% Astr & 76% nAstr.

No arbitrage has occured, nor is there any step taken to improve it since past couple days.
Please @sota @GuiGou @moonme take note of this as quantity is in millions & if pool remains unbalanced it defeats the purpose of having nAstr ie: stake in dApps + algem. As many invest seeing instant swap feature as alternative to unbonding period.(as seen by unbalancing as event nears end)

Talk to Serius Finance to balance pool as this is unsustainable. As i said after event it has huge risk of going 1sided (only nAstr left).

Note:- @moonme Please solve the issue rather than worrying about multiple threads, i have staked “Thousands of $” & already couple dApps have underperformed so my concern is legit & unaddressed since couple days. Threads should be your last priority. I have staked huge amounts in “Community” which provides Ambassadors rewards so i need an answer.
VC’s money is not enough, its big retail investors which you have less, & their confidence dwindling.

“23% - 76%” is red flag & important not “threads”.
(With all due respect)

@Nishith

I am not the developer of Algem but I moderate this forum. So, asking me to solve Algem’s issue is not something you should think of.

You need to address this matter to the developers of Algem.

Also, the ambassadors are not involved in building Algem.

The founder of Algem, @Gunit is indeed an Ambassador of Astar but that doesn’t mean the whole group of Ambassadors are the founders. So, please don’t point this issue towards the Ambassadors.

You need to understand that Algem is a third party product, not by Astar.

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Hi @Nishith

The pool is unballanced because liquidity providers deposited most nASTR than ASTR in the pool but don’t worry, 1 nASTR always means 1 ASTR stacked in ALGEM.

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It’s a stability pool, so you cannot directly do some arbitrage for the time being.
A smart user will use Sirus Finance (instead of Algem) to get nASTR (you can gain 0.07% via Sirius Finance).

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To be honest, I don’t understand really your concerns.
Even if the pool is 90% nASTR / 10% ASTR unballanced, a user who deposited 50 nASTR + 50 ASTR at the begining will receive at least 90 nASTR + 10 ASTR when leaving the pool.
Then the user will be able to convert 90 nASTR to 90 ASTR with an unbonding period. This means the user will receive at least the same amount of ASTR + trading fee + staking rewards.

I have the feeling there is a misunderstanding of what nASTR token means and the behavior of the ALGEM protocol.
Please feel free to come to ALGEM discord and ask questions about the protocol.

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