As the bear market of 2022 rages on, QuickSwap must do everything in our power to increase yield opportunities and create additional revenue streams for our dex and its users. Earlier this month, we voted for and implemented a predictions market to accomplish this goal, but we need multiple avenues of growth to stay ahead of the competition. That’s why we’d like to discuss the possibility of introducing an isolated lending and borrowing market natively on QuickSwap.
TL; DR:
- During bear markets, DeFi platforms and the people who rely on them often struggle to maintain adequate revenue to sustain their growth and development.
- We would like to start a discussion about the possibility of introducing an isolated lending and borrowing market built using Market XYZ’s tools natively on QuickSwap.
- An isolated lending and borrowing market will increase yield opportunities and create an additional revenue stream for QUICK stakers and the QuickSwap Foundation.
- Lending and borrowing markets also generate increased community economic activity.
- From these markets, many other DeFi tools can be built upon to compound value.
- We have already built the market using Market XYZ’s build a market tool and will be ready to deploy it on our user interface if and when the community votes in favor of the proposal.
- Market XYZ has experience building such platforms and is a trusted friend of the Polygon ecosystem.
- The code has already been audited and no security vulnerabilities were discovered.
- We value your input, which is why we’re introducing this discussion before conducting a governance vote.
- We would like to move quickly and (we hope) pass this proposal so that we can finalise the details and launch it.
- Please read through this entire document carefully before forming an opinion.
- Once you’ve read though, visit our Reddit discussion forum to ask and questions and chat with the community: https://www.reddit.com/r/QuickSwap/comments/vh00y1/governance_discussion_should_we_introduce_an/
- We’re running a simultaneous discussion about the possibility of acquiring a v3 to take back volume from our competitors. Read more about that here.
Dragons and dragon enthusiasts, today we’re introducing a discussion about something that we believe will benefit all QuickSwap users. We would like to introduce an isolated lending and borrowing market natively on QuickSwap. We think that featuring this platform will bring many advantages and next-to-no disadvantages for our DEX and community.
What is Market XYZ?
Market XYZ is a Market Protocol that empowers anyone to create isolated interest rate markets that enable the borrowing and lending of any ERC-20 token. With Market XYZ, you can leverage assets you believe in to maximise your yield, contribute to risk management, and create unparalleled opportunities to make the most of DeFi. Market XYZ’s Market Protocol has been audited by Fixed Point Solutions.
How would the isolated lending and borrowing market work on QuickSwap?
With the QuickSwap Market Protocol, users would be able to use their native LP positions as collateral. Users could take leverage by borrowing against them while still earning LP fees.
Featuring an isolated lending and borrowing market on QuickSwap would increase yield opportunities and give users the chance to raise money without selling their favorite crypto assets. This would also give LP tokens added utility while enabling users to limit their risk potential and exposure by containing it to certain market pools.
Breakdown of Fee Split
Upon borrowing with Market XYZ, the user will pay interest. The interest fees collected will be distributed as follows:
- 90% of the interest collected from borrowers will go to the lenders
- 5% of fees collected will go to Market XYZ
- 3.33% will be used to market buy QUICK and distribute to stakers in the Dragon’s Lair
- 1.67% will go to QuickSwap’s Foundation, which we use to fund our development and operational costs
If this governance vote passes, we will provide a detailed tutorial about how it works when it launches.
Revenue Estimation
Please keep in mind that we have no real way of knowing how much revenue the isolated lending and borrowing market could bring in. Due to dynamic interest rates (supply/demand), it’s difficult to estimate revenue generated. What follows is a conservative estimate based on recent data from similar implementations.
If we secure $10 million TVL, we can roughly expect $10-$20K per month in direct revenue. The real value in this proposition is not from the direct revenue, it’s from the economic activity having an isolated lending and borrowing market will generate around our community.
For example, this will lead to:
- Increased TVL and volume
- Building blocks for more DeFi tools
- An increase in user activity on our DEX
- An increase in value held on Polygon
Weighing the Pros & Cons
Every opportunity for change brings advantages and disadvantages. At QuickSwap, we believe that implementing the isolated lending and borrowing market offers many advantages with very few disadvantages.
Pros
- Increased user engagement
- New opportunities to generate additional revenue
- Added utility for LP tokens and positions
- Increased revenue for stakers in the Dragon’s Lair
- Increased revenue to enable the team to continue developing
- Will increase QuickSwap’s TVL and volume as it generates more economic activity
- A new tool for users
- A stronger partnership with Market XYZ
- No change to QuickSwap’s UI/UX for users who choose not to use the isolated lending/borrowing market
- No need for QuickSwap’s development team to build or maintain
Cons
- Increased risk for those who chose to take leveraged positions
- Even though Market XYZ has been extensively audited, the risk of smart contract failure is always present. Please use with caution and only at your own risk.
We hope you’ll see it as we do. The advantages of offering an isolated lending and borrowing market far outweigh the disadvantages.
How would QuickSwap featuring a lending/borrowing market impact me?
That’s one of the best parts: this lending and borrowing market doesn’t have to impact you at all! Because Market XYZ provided easy-to-use tools to build the market, QuickSwap’s development team has been able to focus on improving the new UI, the ongoing token split, and other features that we’ll tell you more about very soon. If you don’t want to use the lending and borrowing market, you don’t have to! Everything you do on QuickSwap now will remain unchanged by the existence of this market. If the community votes in favor of this proposal, you stand to lose nothing and gain everything.
Be sure to visit our Reddit discussion forum as your favorite team and community discuss this proposal. If the community seems on board, we’ll release a formal governance vote in a few days. If that vote passes, we’ll let Market XYZ know and get it launched right away!
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By QuickSwap Official on June 21, 2022.
Exported from Medium on May 2, 2023.