Problem: locking $UST in Pylon pools is a big commitment given the relatively long timeframes. We are talking about - what it feels like - ages in the crypto space.
Right now users have no way to sell or trade their position in the pool, in case they need to. Once you are in, you are in. You just gotta wait until your lock up period is over.
Solution: allow these positions to be tradable. As what happens with LPs, users would obtain a token as a receipt for their deposit into the pool. This receipt can either be used to claim the pool's tokens or sold on the market. And we are free again to get our money back!
Pros: liquid pools (sort of like liquid staking, but in pylon pools) unlock various benefits.
For example: allow users to make profit if the protocol tokens in the pool have increased in value.
Allow other users to purchase pool allocations in case they are bullish on the pool
Beware: this is not the same as adding more funds to the pool. If user A is bullish and user B wants to sell its allocation, user A has more interest in purchasing the allocation of user B rather than adding more liquidity to the pool (he can also do that later on)
Pylon pools split the total amount of tokens available to the participants in proportion to the amount of liquidity provided.
Therefore, for user A it may be profitable to obtain a share of the already present liquidity (user B's) instead of increasing the total liquidity and still split rewards with user B, which has its liquidity locked in the pool.
Another pro is that @pylon_protocol can earn fees from the trades of these allocations. This could represent a source of income for the protocol while allowing more flexibility and more opportunities to users.
I bet there are many users who have not participated in some pools because the idea of locking away liquidity simply does not sit well with them. With liquid pools (or tradable allocation) anyone is able to exit when they feel like it. Of course, at the market price.
Soon yAssets from @prism_protocol will be available to be locked into pools, and this alone will be better then locking up fiat currency ( $UST ) which depreciates over time. I still think the idea of these tradable allocations could be interesting to see in action
So TFL is burning 88 millions of $Luna to $UST to fund different initiatives, most notably Ozone.
Well, you think that is running smoothly?
I thought so too 🧵
And it actually did. Like a swiss clock, every 800th block the community address (terra10kjnhhsgm4jfakr85673and3aw2y4a03598e0m) has been burning 520,000 $Luna for $UST.
Until this happened:
On November 16th, the address
terra1z8wl9y9lztd047cyhwdfwgsz853ywamg34pys8 has started tipping 0.01 $UST the community address.