Community Call Notes #6–3/11/22

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White Whale

4 min readMar 11, 2022

Notes from Community Call on March 11, 2022, at 1 pm EST on our Twitter

Announcements

With the overload of the TFL nodes from the Mars token and Prism farm launch, it has become more obvious that dApps on Terra need to run their own validator nodes
In case people were worried, we have run on our own nodes from the start.

Flash Loans currently can only be done by writing your own contract to interact with our UST vault contract
Documentation coming soon
Working on a second contract to make it easier to call flash loan
Flash loan fee — 0.1%
80% of the fee goes to the UST vault
20% of the fee goes to Treasury which is ultimately distributed to Whale stakers
First public flash loan called! Check out here!

Step 1: Call Flash Loan Smart contract
Step 2: UST is provided from the Vault
Step 3: User Actions (Arb, Exit CDP, etc.)
Step 4: UST paid back to Vault + Fee
Steps 1–4 all happen in 1 Tx and the tx fails if UST isn’t paid back plus the fee

vUST-Whale pool adds constant buy pressure to Whale token from the approximately 8 million UST in the pool that will soon be earning anchor earn plus arb and flash loan yield
The UST-Whale pool will still exist with 1 million in POL
This is to ensure that the whale token price feeds from the terraswap pool to coingecko and coinmarketcap do not get messed up
We are setting up a bot to arb between the vUST-Whale pool and the UST-Whale pool

Will launch with bluna/luna, lunaX/luna, and cluna/luna arbs
21-day lock on the vault
Locking is necessary because a portion of lunas in the vault will be locked up in the 21-day redemption for bluna, lunaX, and cluna
No more manually swapping to bluna, lunaX, or cluna and then redeeming it yourself in 21 days, deposit and watch your luna stack grow

Looking for experts in Terra infrastructure to help reduce our latency. Please reach out in Twitter DMs or on discord.

We are not opposed to accumulating ANC with the treasury based on the direction of the current discussions regarding restructuring anchor earn. This would make sense as we are quite dependent on Anchor.

With the launch of our Flash Loans, we want to empower the community to create use cases for our product
Winners will get a prize grant determined by the white whale community
We would love to get our community as involved as possible with both running the hackathon and being a part of the hackathon
There are tremendous use cases for flash loans and we want to bring those to Terra
We will be opening a Hackathon discord channel soon

Self-Liquidation — Exit collateralized debt position

An example of a collateralized debt position is an Anchor loan with bLuna as collateral. During a market correction, the value of bLuna collateral declines and may fall below the threshold that triggers liquidation by Kujira or other programs. Liquidation leads to 3%-15% penalties and about 25% of the position is liquidated. Our flash loans could be used to protect the assets’ value in the deposit because a liquidation protection app could call our flash loan smart contract and liquidate its own collateralized position at market rate not at a considerable discount to liquidators. The flash loan fee of 0.1%, is much better than 3–15%. Moreover, the amount liquidated could be smaller, for example, just 10% of the position.

Collateral swapping on Anchor

Collateral Swapping is a mechanism in which a collateral debt position (e.g. sAvax) can be replaced with another debt asset (e.g. bLuna) without the borrower providing the new debt asset while keeping the old active to prevent liquidation. Why would investors want to switch out their collateral? If the investor believes that the new debt asset will appreciate more or hold its value better in a downturn, then it makes sense to switch out the collateral. This is traditionally done by paying back the loan to unlock the vault and then switching the collateral asset. However, flash loans close the collateral positions with borrowed funds and immediately opens the new collateral position with the different asset. For example, let’s presume a borrower uses token A (sAvax) as collateral but thinks that A’s price will drop or that token B (bLuna) will appreciate faster. In that case, he or she can swap the collateral by taking a flash loan for another token, B, and exchange A for B to implement asset swap.

The next community call will be on 3/25/22 on our Twitter.