Hi @neo_defi I’m afraid this would not solve anything, in case LAY is very low, there will be no liquidity to reimburse treasury.
It’s important to understand I’m not talking about trust (I trust Starlay is willing to honor their debt) but about numbers, so let’s take situation to illustrate:
Loan proposed
Add 1M to the pool so ~66 000 000 $LAY + 8 200 000 $ASTR
LAY-ASTR LP = $1 375K = ~91 000 000 $LAY + 11 300 000 $ASTR
Starlay part = 72.7% of the pool
Now let’s imagine what can happen in 1 year in case ASTR performs better than LAY.
Starlay withdraws 72.7% from the pool and gets $947K => 90 000 000 $LAY + 6 029 000 $ASTR
Remaining in LAY-ASTR LP = $355K = ~33 800 000 $LAY + 2 260 000 $ASTR
=> Starlay is missing 2 260 000 $ASTR to refund Astar treasury. This is the totality of $ASTR remaining in the pool so it can’t be swapped. Astar treasury loss = $170 000
Scenario 2
Things don’t do as planned at all and LAY price falls: LAY -70% and ASTR +30%
ASTR = 0.0785
LAY = 0.00225
LAY-ASTR LP = $852K => ~189 000 000 $LAY + 5 430 000 $ASTR
Starlay withdraws 72.7% from the pool and gets $620K => 138 000 000 $LAY + 3 950 000 $ASTR
Remaining in LAY-ASTR LP = $232K = ~51 700 000 $LAY + 1 480 000 $ASTR
=> Starlay is missing 4 250 000 $ASTR to refund Astar treasury. This is 3x the totality of $ASTR remaining in the pool so it can’t be swapped. Astar treasury loss = $334 000
The numbers speak by themselves to explain why the risk for Astar treasury is too important to accept this loan without guarantee of refund depending on market conditions.
It’s quite strange to read this, everyone understands the risks of a loan for LP, this is hypothetical, no one knows what will happen in a year. The question is about the risks, if the project is an incubation one, then support is needed, especially in such a market. The fact is that the project is already in a bad position, and if it is abandoned, then this is a negative for Astar, and if the project can be put on its feet, then this is a very positive moment for Astar. The only question is, does Astar believe in the incubator project? If so, then he must accept the risks, perhaps reduce the amount. If he does not believe, then why did he call him incubation?
Thank you for the post @bLd759
But not as speaking as a member of the Starlay team but as a personal opinion, I feel the same way as @Trickster and @nancheng … (seems @nancheng 's post is deleted…?)
Also, the price of LAY is what the Starlay team is responsible for. But the price ASTR is what Starlay can contribute to through building Starlay but it is out of our control…
In your example, you raised the price of ASTR from 0.06 to 0.0785. It is a good thing for Astar ecosystem so to speak. But I feel strange if the Starlay team needs to reimburse for that…
I didn’t use example where LAY outperforms ASTR because of course in this case the loan can be refund.
We don’t talk about incubation here but use of the Astar treasury funds, which is common good of all Astar community.
My initial question was “is there an external guarantee in case the pool can’t refund”, since there was no response I assumed there is not so I pointed out the risk.
Thank you for bringing that up. I think it has to do with what categories the funds are disburse:
Assuming this is a loan, as you say, there should be financial security. However, the funds should be set at market-appropriate interest rates.
For example: borrow 100 astr due to pay 120 astr, 20% annual interest. I think that’s appropriate. This means that other revenue generated should be attributed to the project and not to Astar treasury.
Assuming this is an investment loan, I think the risk of capital loss should be borne. As you said above, tens of thousands of investments could be lost. However, it may also bring in benefits several times over.
Before you start with voting make sure you understand what this poll is about. Read more in the thread above. Voting allowed for members with a minimum of trust level 2.
Why they ask liquidity:
Link to Sota’s proposal:
Provide liquidity to Starlay with the conditions mentioned in Sota’s proposal
At the moment, lay has stopped falling, although the market is flying into the abyss. there is definitely interest in the project, and a lot of people read the forum, so the result of the vote will directly affect the price. As I understand it, the price will rise due to the result of the vote, it remains to fix it with liquidity.
Might be a very basic question, but how do you satisfy the requirement to vote.
If there is an explanation somewhere on how to be eligible to vote, that would be helpful.
I really like to vote for this topic. Thank you very much!
Its not about being active in short period. Level 2 trust is also related on the time you joined and being active in that duration this is to prevent users being active in just a couple of days to gain that level.
i think (STARLAY) should get one chance to correct all this mess created by themselves. rest is on @sota@Maarten (ASTAR CORE TEAM) and rest of the voters.