May 6, 2022
The true power of Mars lies in its credit lines. With them, third-party protocols can borrow from the Red Bank without first depositing another asset as collateral.
This special form of lending — dubbed Contract-to-Contract (C2C) lending — happens in the Fields of Mars, and it’s the key to Mars’ widespread adoption. By permitting borrowing of Red Bank assets without first requiring a deposit, it increases yields for depositors.
All initial credit lines in the Fields of Mars were issued to leveraged yield farming strategies created by Mars’ builders themselves. Today, Apollo DAO breaks ground as the first third-party protocol to seek a Mars credit line.
Specifically, Apollo DAO seeks a $5 million credit line to enable leveraged yield farming on the ANC-UST pair on Apollo and Astroport. This strategy would be similar to the current ANC-UST strategy in the Fields of Mars, but instead of dual rewards (ANC + ASTRO), it would offer the potential for triple rewards (ANC + ASTRO + APOLLO).
Before today’s launch of a governance vote on the strategy, Apollo DAO sought feedback in the Mars forums. From that post:
Description of the Proposal
Apollo DAO is a yield management and auto-compounding platform on Terra. We propose providing Apollo DAO with access to a credit line from Mars to enable ANC-UST leveraged yield farming on Apollo. This would initially be for the ANC-UST Astroport based vault and would allow users to leverage their vault positions.
The final proposed parameters for the credit line and strategy are listed below.
Read the full forum post for a detailed risk analysis of the proposed strategy. Per the proposal, there would be a minimum deposit size of 300 UST for this strategy. The voting period will last ~3 days. If successful, it will be implemented in the Fields after a mandatory 2-day review period as detailed in the Mars Improvement Process.
All Mars stakers (xMARS) can now ascend to the Martian Council to vote on Apollo’s proposal at https://app.marsprotocol.io/#/council.
If the vote’s successful, it could usher in a new wave of third-party protocols building on Mars.
The future awaits!
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This article does not constitute investment advice. Before interacting with Mars, review the project disclaimers here.