Allow Users to Borrow stATOM

Mars currently only allows users to deposit stATOM, it does not allow users to borrow stATOM. Other borrow/lend platforms in the ecosystem allow for it to be borrowed. Mars should as well.

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Thanks for posting this @Mr_Sneed_Pilled ! It’s an interesting topic to discuss.

I think this (as with any changes) comes down to the risk : reward ratio for the protocol.

The main argument against allowing stAtom (or any asset) to be borrowed is that it makes the market more susceptible to manipulation.

For me the key questions we need to know are:

  • How much risk does this present the protocol? (i.e shortfall)

  • How does this impact other protocol users and use cases? Does it make their risk greater?

    • long positions with stAtom collateral
    • ATOM:STATOM Apollo farm
  • How much revenue will lending stAtom generate for the protocol?

Initially thoughts, based on my understanding of the above, I am more opposed to this than for it because I think that the reward (protocol revenue) will be very little - currently umee supply rate for stAtom is 0.05% - so I think the revenue from this will be negligible, thus making a bad risk:reward tradeoff.

Interested in what others think @JonathanE @dancreee