Proposal to Approve Pawn Bots & BOTSp as Collateral

Proposals
1

I propose that we allow Pawn Bots and BOTSp to be used as collateral on hifi.Finance. This means that people who own Pawn Bots or BOTSp can use them to get a loan, just like using a house or a car as collateral. To make this happen, we need to have a vote and approve the proposal.

The reason for this proposal is to give more options to people who own Pawn Bots or BOTSp. By allowing them to be used as collateral, they can get a loan and have more flexibility with their assets. This can also help increase the adoption of Pawn Bots and BOTSp, which can benefit the overall community.

To make this happen, we need to have a vote and approve the proposal. This proposal is pretty simple and straightforward, and it aims to provide more options and flexibility for people who own Pawn Bots or BOTSp.

3 Likes
2

Let’s go.
Is it necessary to vote what they can borrow against using BOTSp as collateral?
Or is this given by the possiblities by the protocol?
For this vote: only BOTSp or erc-token in general open for any NFT collection already?

3

Draft Proposal: Based off Max’s Blog Post.

Summary (TL;DR): This proposal seeks to allow Pawn Bots and BOTSp to be used as collateral on Hifi.Finance. By doing so, it will provide more options and flexibility for people who own these assets. This will increase the adoption of Pawn Bots and BOTSp, which can benefit the overall community.

Background: Pawn Bots and BOTSp are digital assets that have been growing in popularity in recent months. BOTSp allows users to earn rewards by participating in liquidity pools on Uniswap. However, despite the popularity of both BOTSp & Pawn Bots, there are currently no options for users who want to use these assets as collateral to secure a loan.

Problem: The current lack of options for users who own Pawn Bots or BOTSp limits their flexibility and ability to generate value from these assets. This creates a missed opportunity for these users and limits the potential of these assets to contribute to the broader community.

Solution: This proposal seeks to allow Pawn Bots and BOTSp to be used as collateral on Hifi.Finance. This will provide users with more flexibility and options to generate value from these assets. By doing so, it will increase the adoption of Pawn Bots and BOTSp, which will benefit the overall community.

Requirements: To implement this proposal, the community will need to vote and approve the use of Pawn Bots and BOTSp as collateral on hifi.Finance. Additionally, a smart contract will need to be developed that allows for the use of these assets as collateral.

KPIs: The success of this proposal can be measured by the adoption of Pawn Bots and BOTSp as collateral on Hifi.Finance. Metrics such as the number of users who use these assets as collateral and the total value locked in the smart contract can be used to assess the success of this proposal.

Conclusion: This proposal seeks to increase the value and potential of Pawn Bots and BOTSp by allowing them to be used as collateral on Hifi.Finance. By doing so, it will provide more options and flexibility for users and increase the adoption of these assets, which will benefit the broader community. We encourage the community to vote and approve this proposal so we can move forward with implementation.

1 Like
4

It is my intention to add some questions to each section to enhance the proposal and make it stronger and better, as well as give a broader context to those who join the forum and can understand the proposal better.

Share your thoughts and ideas to keep the conversation open.

Summary:

  1. How do you anticipate the addition of Pawn Bots and BOTSp as collateral options will impact the overall liquidity on Hifi.Finance?

  2. What are the potential risks associated with using Pawn Bots and BOTSp as collateral, and how do you plan to mitigate those risks?

Background:

  1. Can you provide more context about Pawn Bots and BOTSp, such as their creation, developers, and their underlying technology?

  2. Have Pawn Bots and BOTSp demonstrated a consistent growth trend in popularity or is it primarily driven by short-term hype?

Problem:

  1. Can you provide examples of other digital assets that have been integrated as collateral options on Hifi.Finance or similar platforms, and what impact did those integrations have on the respective assets and platforms?

Solution:

  1. What is the criteria for determining the value of Pawn Bots and BOTSp when used as collateral, and how will it be ensured that this value remains stable and accurate?

  2. How will the introduction of Pawn Bots and BOTSp as collateral options affect the current users of Hifi.Finance, and will there be any changes required in the platform’s existing infrastructure?

Requirements:

  1. What is the expected timeline for the development and deployment of the required smart contract, and what resources will be needed to ensure its successful implementation?

  2. Are there any legal or regulatory considerations that need to be addressed before Pawn Bots and BOTSp can be used as collateral on Hifi.Finance?

KPIs:

  1. How will you ensure the accuracy and transparency of the metrics used to measure the success of this proposal?

  2. Are there any other qualitative factors, such as user satisfaction or market perception, that will be taken into account when evaluating the success of this proposal?

Conclusion:

  1. In the event that this proposal does not achieve the desired results or faces unforeseen challenges, what contingency plans are in place to address potential issues and ensure the ongoing stability of Hifi.Finance?
5

Welcome to the forum. Keep asking questions and giving feedback to the open proposals.

6

Sure, here’s a response:

Summary:

** Question: Will allowing Pawn Bots and BOTSp as collateral on Hifi.Finance increase liquidity?*

** Answer: Allowing Pawn Bots and BOTSp as collateral on Hifi.Finance could increase liquidity by giving users more options to generate value from their assets. This could generate more interest in the assets and create more liquidity. However, potential risks such as price volatility and liquidity issues will need to be monitored and as a prototype — Hifi Labs is able to use BOTSp and Pawn Bot “vaults” as a guinea pig to test the use case.*

Background:

** Question: Can you provide more information about Pawn Bots and BOTSp and their developers?*

** Answer: Pawn Bots and BOTSp are digital assets (ERC -721 and ERC-20) created by Hifi Labs on the Ethereum network. The popularity of these assets seems to be growing steadily, indicating sustained interest.*

** Question: Have Pawn Bots and BOTSp experienced steady growth or is their popularity driven by hype?*

** Answer: The popularity of Pawn Bots (minted 7/7/22) and BOTSp seems to be growing steadily, indicating sustained interest beyond short-term hype.*

Problem:

** Question: Can you provide examples of other digital assets that have been integrated as collateral options on similar platforms, and what impact did those integrations have?*

** Answer: Integrating stablecoins such as USDT and DAI as collateral options on similar platforms has increased liquidity and adoption. By allowing Pawn Bots and BOTSp as collateral, we can similarly anticipate an increase in liquidity and adoption on Hifi.Finance which will drive TVL back to Hifi.Finance — which is the over-arching goal; to drove value back to Hifi.Finance (as a decentralized DAO based protocol/ entity).*

Solution:

** Question: How will the value of Pawn Bots and BOTSp be determined as collateral, and will there be changes to the platform’s infrastructure?*

** Answer: The value of Pawn Bots and BOTSp as collateral will be determined using reliable oracle data to ensure accurate valuation. To maintain stability and accuracy, the value will be updated in real-time. There should be no major changes required to the existing infrastructure of Hifi.Finance. However, also there have also been references to a compounding liquidity pool which will grow and be available to access thos capital as a Pawn Bot or BOTSp holder — so this will in theory generate a price appreciation in Pawn Bots and BOTSp (tail wagging the dog); because these digital assets will be allowed to borrow 50% of their equity value; so has the access to capital compounds, so will the ability to access that liquidity.*

Requirements:

** Question: What is the expected timeline for the development and deployment of the required smart contract, and what resources will be needed to ensure its successful implementation?*

** Answer: The expected timeline for the development and deployment of the required smart contract is around 7 days :grin::crossed_fingers:.*

** Question: Are there any legal or regulatory considerations that need to be addressed before Pawn Bots and BOTSp can be used as collateral on Hifi.Finance?*

** Answer: Legal or regulatory considerations are being explored to ensure the use of Pawn Bots and BOTSp as collateral is compliant.*

KPIs:

** Question: How will the success of this proposal be measured, and what factors will be considered?*

** Answer: Success will be measured by the number of users who use Pawn Bots and BOTSp as collateral and the total value locked in the smart contract. Reliable data sources will be used to ensure accuracy and transparency. User satisfaction and market perception will also be considered.*

Conclusion:

** Question: If the proposal does not achieve the desired results or faces challenges, what contingency plans are in place to address potential issues and ensure the ongoing stability of Hifi.Finance?*

** Answer: If the proposal does not achieve the desired results or faces challenges, we will work with the community to identify potential issues and develop contingency plans to ensure the ongoing stability of Hifi.Finance.*

7

HiFi desperately needs liquidity.

8

Where do you propose this liquidity comes from? How do we propose to have liquidity become sticky, ie, staying longer than a week or two?

1 Like
9

One thing that I would like to mention, like the poster above is that we very likely have more demand for borrowing, than we have liquidity for.

I’ll give some numbers here to help push this forward.
Total USDC available on HiFi: $423k
Total marketcap for PawnBots: $1m (7082 NFTs x 0.08 Floor Price = 566 ETH / $1m)

Right now, theres enough liquidity available on the lending platform for around 42% of all Pawn Bots to get a 100% loan. I estimate we have enough latent demand the numbers will be closer to 10% of all Pawn Bots get a loan within the first 30 days of it being available. 10% of 7k is 700 PBs, with an average borrow amount of 70% of current value, puts the USDC demand at $72k / 39 ETH. Which we can easily handle. But, since the system works on a scale where when demand goes up, interest rate goes up, im estimating off the top of my head, we will see interest rates hit 25-30%. Which is high enough to turn many people off from engaging on this at those kinds of rates. We solve this through 2 ways
-More liquidity
-Less demand

More liquidity will only occur if we, the community put more money in upfront or wait for the periods of time where the interest rate hits a point where people find it too high to borrow with and we see demand fall, and then add more liquidity to make it more appealing. Less demand happens naturally when rates are too high and sometimes we want that, but for the first collection, i’d personally like to see hifi make as big of a splash as possible.

@Josue is it possible to get an interest calculator tool so we can better estimate rates based on current liquidity and simulated demand?

10

Wasn’t there mention of just doing like $50,000 in liquidity from the get go? would that solve the initial obstacle?

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I support the premise of the proposal and is a good discussion & starting point.
Gr8 comments surrounding interest rates, LVR, liquidity etc and I look forward to the final proposal which will have fleshed out the finer detail for considerarltion.

12

I support this proposal 100%. We need to start the pawnbots/botsp borrowing as soon as posible, benefits are huge, users will see and prove our protocol works. In my personal opinion we dont need to wait for poolednft new version to start borrowing with pawnbots and botsp the protocol is live and running.

13

Hifi.Finance may benefit from double-digit interest rates, as it could attract more lenders to deposit USDC providing more liquidity for PawnBot & BOTSp holders to borrow against. However, high interest rates may deter potential Pawn Bot / BOTSp borrowers, resulting in less demand. One solution could be to find a balance between allowing borrowers to borrow the maximum amount while keeping interest rates attractive. The compounding liquidity pool concept could provide stability, incentivize users to deposit funds, and support the borrowing demand for Pawn Bots and BOTSp.

The compounding liquidity pool should prove to provide several benefits; a stable source of liquidity, allowing more borrowers to access funds at lower interest rates. It should also incentivize users to deposit USDC to earn returns, which increases the overall liquidity of the platform. Additionally, it helps to prevent liquidity shortages during times of high demand.

14

Your observations are quite insightful. A balance between liquidity and demand is crucial for any financial system to function optimally. Given that Pawn Bots (The new NFT collection) could be used as collateral in Hifi, it’s reasonable to expect an increase in demand for borrowing.

As you rightly pointed out, this surge in demand needs to be managed to prevent a steep rise in interest rates which could discourage potential borrowers. Increasing the liquidity or moderating the demand are both effective strategies to maintain this balance.

I think the calculator would be a great idea to consider and see if it would be a good development project for the developers team. Perhaps creating a proposal would be helpful.

15

Indeed, a compounding liquidity pool could be a good strategy for managing the balance between liquidity and demand. The idea of a compounding pool is to have interest earned on deposits be automatically reinvested, or compounded, back into the pool, thus increasing the pool’s size and earning potential over time.
This could have several potential benefits: attract more deposits, manage demand, increase stability, mitigate risks.
However, as with any financial strategy, it’s important to carefully consider and manage the associated risks.