21 Aug 202205:15
Sturdy AMA Recap
SamHi everyone! Thanks for having me @deniscryptodiffer!
Denis (CryptoDiffer)Welcome, thank you for taking your time today!
Our team has prepared some questions for you to start with:
Let`s start with the introduction !
Q1: Can you introduce yourself to our community?
SamHi everyone! My name is Sam and I'm the founder of Sturdy. Before founding Sturdy, I dropped out of Stanford where I was studying math and computer science. Previously I did research in cryptography which is what initially spawned my interest in crypto(currency). From there, I fell in love with the applications during DeFi summer.
Denis (CryptoDiffer)Q2: Can you introduce Sturdy to us?
SamSturdy is a new kind of DeFi lending protocol that enables users to earn high stablecoin yields or take out interest-free loans.
On existing lending protocols, the interest earned by lenders comes from borrowers. So in order for lenders to earn more, borrowers must pay more. Sturdy uses a different model, where yield instead comes from the borrowers' collateral.
When borrowers provide a token as collateral, Sturdy converts it into an interest-bearing token (ibToken) using protocols like Yearn or Lido. Over time, these ibTokens accrue yield; the yield from these tokens are then distributed to lenders in the same token they deposited
Denis (CryptoDiffer)Q3: Let`s now talk about the milestones you have achieved so far and about your upcoming plans?
SamWe launched on Fantom in late March and recently deployed on Ethereum mainnet. Since launch, we've added a number of different assets as collateral including FTM, CRV, and LINK on Fantom, as well as ETH on Ethereum. We also launched an Immunefi bug bounty and recently completed our second audit. We now have ~$15m TVL and are offering competitive yields on both Fantom and Ethereum.
One upcoming plan that we're really excited about is enabling users to provide Curve LP tokens as collateral in order to 10x their yields. We will also be partnering with protocols that will use this mechanic to grow liquidity for their pool.
Denis (CryptoDiffer)Q4:What protocols does Sturdy stake collateral in?
SamOn Fantom, we exclusively stake in Yearn. On Ethereum, we stake in Lido and Convex.
Denis (CryptoDiffer)Q5:It seems like staking collateral in third-party protocols adds additional risk; how do you mitigate this?
SamSturdy carefully vets every protocol it integrates based on the following risk management framework: TVL (both of the protocol and the specific strategy)
Time in the market (both of the protocol and the specific strategy) Audits Security history Administrative permissions (governance, multisig, etc.) Downside economic risk of the strategies employed (e.g. impermanent loss) For aggregators like Yearn that provide funds to other protocols, this analysis is performed on those protocols as well.
All integrations are non-custodial, on-chain, and transparently outlined in our docs.
Denis (CryptoDiffer)Q6:You mentioned the 10x lp potential of Curve use cases, could you elaborate a bit more?
SamUsers will be able to deposit Curve LP tokens as collateral at ~90% LTV. They will keep all of the Base Curve APR and roughly half of the CRV rewards. They can lever up by looping the loans back into Curve to multiply their yields by up to 10x. For example, this would come out to ~90% APY for sUSD Curve LP tokens at max leverage! (based on the current Convex yields)
Denis (CryptoDiffer)Thank you for such detailed and interesting answers!
It is time to move to the community questions part.
Let's remind AMA rules to the community😊
❗️ AMA structure and rules: 👥
- Community questions part starts after the guest/guests finishes/finish answering the introduction questions asked by the moderator. Moderator unmutes the chat to allow up to 100 messages and mute it.
- Each person is allowed to write only one message containing 2 questions, violators will be disqualified from participating in the reward distribution.
- Copy-pasted questions from previous AMAs are strictly forbidden, violators will be disqualified from participating in the reward distribution.
- All questions&concerns regarding AMA members should send in dm to @cryptodiffer_admin
- Important, please don`t write to other CryptoDiffer team members, they won`t be able to help you.
- Winners are chosen by Guests.
I will open the chat at 3:42 UTC, check exact time on time.is
Chat is muted! Thank you for your questions, everyone!
Sam|CEO&Founder|@pgpsam,please choose the questions you like and answer them! If you wish to have additional rounds, just let me know
Cryptodiffer Community❇️ You mention that when we lend stable currencies in Sturdy, we will be able to get access to yields normally reserved for more volatile assets, this sounds really interesting. can you explain more about this? How much yield can I manage to get just by lending my stable coins, what factors does this depend on?
SamBecause yield comes from collateral assets, stablecoin lenders are earning yields on volatile assets (like ETH) without exposure to price! Yields are ~10% APY on Ethereum at the moment.
Cryptodiffer CommunityDo I have to KYC or pay a fee to borrow on Sturdy? Is it enough to just pay the transaction fee to borrow money?
SamNo KYC, the only fee to borrow is gas usually. The exception is if we have low liquidity (utilization rate > 90%), in which case an interest rate is instituted
Cryptodiffer CommunityIn a medium article I read that in the future, borrowers may keep some of the yield from staking. Is there an ETA for the launch of this feature? Can you give us some details on how it will be implemented? How will lenders be affected in this regard?
SamThis will be live within the next week, specially for certain Curve LP tokens we’ll be rolling out. Borrowers will earn some CRV for providing Curve LP tokens as collateral. This should increase lending APY as it makes borrowing much more attractive.
Cryptodiffer CommunityI understand that loans on Sturdy are interest-free as long as the utilization of a reserve remains less than 90%. In the case where the reserve utilization sprouts beyond 90%, what will be the interest rates that borrowers will pay? Also, is there a way for borrowers to see the current Utilization of a particular reserve before they proceed with borrowing from the protocol?
SamAbove 90%, rates increase 4% for every 1% increase in utilization. Borrowers can check current utilization by clicking one of the boxes on the ‘Market’ page
Cryptodiffer CommunityI noticed you said "positive sum lending protocol" for Sturdy, can you tell us what this positive sum lending protocol means? What does Sturdy offer us, unlike existing DeFi lending protocols?
SamOn existing protocols, borrow APY > lending APY (meaning borrowers pay more than lenders earn). Sturdy is the other way around thanks to its collateral staking model: lenders earn more and borrowers pay less!
Cryptodiffer CommunityI understand that when a borrower deposits a token as collateral, Sturdy converts it into an interest-bearing version of that token (ibToken) which is then locked in Sturdy's lending pool smart contracts, where it generates yield over time. Can you tell us how this yield on collateral ibTokens are harvested and distributed? Are they harvested daily, or weekly or monthly?
SamYield is harvested and paid out daily
Cryptodiffer CommunityBeing the first of its kind DeFi protocol for interest-free borrowing and high-yield lending, how does Sturdy generate income for the ecosystem since it does not charge borrowers interests?
SamSturdy collects 10% of yield generated by collateral as revenue
Thanks for the great questions everyone! That’s all the questions I’d like to answer @deniscryptodiffer
Denis (CryptoDiffer)Thanks for your time
Thank you to everyone who took part!