Spectrum Protocol — The 2nd Roadmap
Thank you for the community to be a part of our first 50-day launch and overwhelmed support to a growing protocol’s TVL. It has been an amazing journey!
We have delivered all planned features during last two months and the audit is about to be completed. With only yield optimizer vaults for upcoming 70+ projects to be farmed on Terra, Spectrum Protocol already has a lot of works in the pipeline.
However, while Terra is the blue ocean, we must build our foundation to be ready for the red ocean. We can see the building blocks which will both empower users and strengthen our platform. Here are new products that we are going to build:
- Single Asset Farming
- Borrowed Farming
- Short Farming
- Fixed-term SPEC Staking
Single Asset Farming
If you think asset price will go up, putting asset to LP farm might not be the best idea. First, you need a half of your budget in UST in order to farm (for most LP pools). Second, LP farming involves impermanent loss. However, holding asset in the wallet also produces no reward, and you lose an opportunity cost to earn other income.
Single Asset Farming let you deposit tokens, similar to putting your money into the bank, you will earn an interest (plus SPEC reward). For governance token, you will also earn governance income on top of the reward and interest.
Borrowed Farming
For Mirror Protocol users, you might already know about Delta Neutral Farming. It is the technique to earn rewards with very low impact on principal (less than 2% on principal excluding protocol fee). You can earn very high yield with this technique (around 40%) while having similar price impact as deposit stable coin.
However, Delta Neutral Farming has a little bit complicated process, and only available with mAssets within market hours. Moreover, it requires over collateral (about 200% for safety margin) and the underlying position needs to be monitored closely.
Borrowed Farming works by borrowing assets from Single Asset vaults, user only provides UST to farm. You can farm with any assets (yes, ~400% APY SPEC vault included) at any time. You provide $100, you farm $100 ($50 UST, $50 Token) without over collateral. In addition, it requires less monitoring, auto-compound and auto-repay will improve the loan to value ratio (LTV) as you farm.
Short Farming
For Mirror users, you might already know short farming. Spectrum Short farming is similar, but not limited to mAsset. Short Farming works by depositing UST as collateral (no over collateral) and assets will be borrowed from Single Asset vaults and sell automatically to the market (Terraswap or other DEX). When closing the position, Short Farming will buy assets back and reconcile profit or loss for you.
Interest bearing collateral
When you short, UST will also be deposited into Anchor to maximize your yield and improve loan-to-value ratio over time.
Delta Neutral Farming on Spectrum?
Yes, you can also combine Short Farming and Normal Farming to do the Delta Neutral Farming on Spectrum. The result could be similar to Borrowed Farming, but Borrowed Farming will be simpler and using less capital. However, Short Farming gives you more flexibility, you can short different size and different timeframe to your long position. Therefore, you can do fine grain adjustment to your position based on your current view and market situation.
Fixed-term SPEC Staking
Thanks to our community, there are a lot of suggestions to do fixed-term SPEC staking. Fixed-term SPEC staking allows users to earn higher governance income in exchange of a withdrawal locking for a period of time. This mechanism will encourage users to hold SPEC and also reduce SPEC supply in circulation.
With this feature, there will be 5 pools of SPEC staking:
Here is the simulation with 30% Gov APR, with the assumption that people will distribute to each pool evenly.
Additional benefit for Fixed-term Staking
Borrowed Farming and Short Farming will have credit limits. With more SPEC staked and more days locked, users will unlock additional credit limits. Details will be announced later.
Conclusion
With this roadmap, Spectrum Protocol will become one-stop shop to manage your assets and maximize your investment on Terra.
