ARC: Raise AMPL's max interest rate

[pakim249]

@Shubiwubi

That is not at all the case, and if you would read the consensus, it is to do nothing at all, other than to point out the special pairing AMPL has on the front-end, and create an AMPL/aAMPL market elsewhere to offset the “trap” many suggested and fell “victim” to, and imho that should be reflected as such as a sound and solid solution for the interim in your ARC, if at all, or approach a re-consideration of the slope, which the core contributor team has suggested highly against.

Pointing out the special characteristics of the AMPL market will not solve the liquidity crunch. And anyone is free to create AMPL/aAMPL liquidity. That is not a solution to the liquidity problem at hand at all.

@Shubiwubi

So, I’ll take the advise of the experts on this matter, everything considered, and suggest to implement the former first, and observe the results in the coming cycle of 4 to 8 weeks before raising this topic once more, if need be.

I’ll be frank. To me, it is very clear that the AMPL team are very much not experts on this matter. We’ve had this discussion before in the other thread, and many of us have advised the AMPL team that the low proposed maximum interest rate will not preserve liquidity in a positive rebase. The AMPL team assured us that further adjustments to the AMPL market will not be needed.

The obvious outcome has now materialized, and it is clear that adjustments need to be made.

I appreciate the AMPL team and community giving their input into this topic, but I am not proposing this to the AMPL team or community. I am proposing to AAVE governance to take action to prevent a completely preventable liquidity crunch like this from happening again.

@Shubiwubi

It is also very true that you’ve been against integrating AMPL on AAVE since the inception, so please just withdraw your ARC for the sake of neutrality, and let this one ride out without you intervening is the sincere ask of myself, and I’m sure, many others in the ecosystem.

Yeah, I would definitely say I’m not neutral in this matter. I’m pretty biased towards functional lending markets that can be used as a base layer for other protocols. I’m perfectly okay with integrating AMPL into AAVE. But unfortunately the AMPL team has chosen the route of experimenting on AAVE with their “stable debt denomination” to force borrowed AMPL to be soft pegged.

I don’t think many people in this discussion truly understand what has happened here.

The asset being borrowed is fundamentally different than the asset being tracked as debt.

This breaks the lending books, and any organic lending activity will be drowned out by those who are exploiting the difference in the books. There has been no satisfactory justification given as to why this “stable debt denomination” on a rebasing token is an economically valid idea, and so I have been against the AMPL market since inception. And will be for as long as the AMPL market functions like this.