Summary
This proposal is to add nAstar to Starlay on Astar. nAstar represents liquid staking assets in the Algem ecosystem, making it easier for users to stake and manage their Astar tokens. Check the forum discussion here: Listing of new collateral tokens - #3 by SeiyaChida
Motivation
This proposal will contribute to attracting new users and increasing TVL.
Algem is revolutionizing the way users interact with the Astar blockchain through its liquid staking solution. By creating nAstar tokens, users can stake their Astar tokens without locking them up, providing increased flexibility and liquidity.
Adding support for nAstar in Starlay pools will attract more users to the platform, increase TVL, and create additional revenue opportunities for Starlay.
Furthermore, by integrating nAstar into the Starlay ecosystem, the platform will become more closely aligned with Algem and the Astar network.
Specifications
Brief high-level overview of the project and the token
Algem is a platform that offers liquid staking solutions for the Astar network, enabling users to stake their Astar tokens without the need for locking them up.
nAstar tokens represent staked Astar tokens and can be traded, providing increased liquidity and flexibility for users.
Positioning of the token in the Starlay ecosystem. Why would it be a good borrow or collateral asset?
Integrating nAstar into the Starlay ecosystem allows users to participate in Algem’s liquid staking while still being able to access liquidity and participate in DeFi activities.
nAstar tokens are expected to have a strong demand, making them an attractive collateral asset in the Starlay platform.
Brief history of the project and the different components
Algem is a decentralized platform providing liquid staking solutions to the Astar network, thus addressing one of the main limitations of staking in blockchain networks - the lack of liquidity. By doing so, it empowers users to engage in DeFi activities without the need to lock up their assets.
How is nAstar currently used?
nAstar serves as the representation of staked Astar tokens in the Algem ecosystem. Users can freely trade nAstar tokens, which offers enhanced liquidity and flexibility for staking operations on the Astar network. nAstar can be used in all DeFi activities, such as lending, borrowing, yield farming, etc., as users would normally do with unstaked tokens.
Market Data (Market cap, TVL, Exchanges, Total liquidity amount)
TVL: $8,524,381
Total liquidity amount:
Exchanges(DEX) / Liquidity: $1.479M
- Kagla finance /$283k
- Arthswap / $501k
- Sirius finance / $695k
※ As of 2023/7/24
Cost
This time the cost for this implementation covered by the SCI team
Time
Will launch on Monday, November 27 or Monday, December 4.
Risk Management
Risk Parameter
nAstar is collateralized by Astar, which is staked on the Algem platform. This mechanism offers a level of security as it is tied to the value of the Astar network, a widely adopted and respected blockchain platform. The risk profile of nAstar is thus highly correlated to the Astar network’s performance and overall market conditions.
To mitigate risk, we suggest implementing the following risk parameters for nAstar:
- Loan to Value (LTV): 30%
- Liquidation Threshold: 55%
- Liquidation Penalty: 15%
- Reserve Factor: 20%
Audit
Algem had its protocol and smart contracts audited by Quantstamp, leader in Web3.0 security. Be aware that a security audit does not guarantee the total infallibility of a protocol. Risks can always be present. Do not stake assets that you cannot afford to lose on Algem.
Pegged with Astar price
On Algem protocol, there is always a ratio 1:1 for minting nASTR and returning it. No matter the ratio of the nASTR/ASTR pair on the market. Users can always redeem the same amount of ASTR from nASTR tokens. However if nASTR holders use their tokens in DEXs to provide liquidity, they face the possibility of impermanent loss and depeg like any farming in DEXs.
To mitigate this risk, users can perform arbitrage strategies between DEXs and Algem protocol using swap, stake and unstake functions. In this way, users have financial incentives to keep the ASTR/nASTR peg and stabilize the ecosystem.
See the nASTR:ASTR ratio section.
Conclusion
Adding support for nAstar on Starlay has the potential to attract more Astar staking, increase the utilization rates on Starlay, and provide additional opportunities for users to leverage their nAstar positions. It can drive the growth of the Starlay platform by enhancing the product offering and aligning with the growing trend of liquid staking.
Next Action
We will put the proposal to a vote via Snapshot in 3 days
Voting Schedule
Snapshot Voting: Nov 11th, 09:00 UTC - Nov 14th, 09:00 UTC.
Voting Option
YAE - Approve the proposal
NAE - Reject the proposal
Note
Please note that for the initial release of nASTR version 1.5, rewards for nASTR are exclusively available for interactions conducted through the Algem platform’s interface/contract. As such, Starlay’s UI feature nASTR on Starlay’s UI but will direct you to the link of nASTR(Algem) interface. We advise users to take note of this to ensure eligibility for rewards.
Furthermore, it is advised that borrowing of nASTR be deactivated to prevent the double spending of dApps staking rewards. As a result, nASTR can only be utilized as collateral for loans and not as a borrowing asset.