(not available at launch)
Default mode
| | Safe mode | 80% of max LTV |(default at launch)
Nexus price oracle failure
| | Emergency mode | 50% of target LTV | Anchor price oracle failure | ### LTV management modes  At launch, only *Safe mode* and *Emergency mode* will be available. *Optimal mode* will be deployed at a later time.  #### Optimal mode In *Optimal mode* operation Nexus will be running its own price oracle for bAssets (bLUNA, bETH, etc.) that will feed the price every 15 seconds. The oracle will use the same logic as the price oracle of Anchor Protocol. Since Anchor's oracle feeds the price every 30 seconds, Nexus will know the prices a little sooner. This will allow Nexus to assess the risk of liquidation in the next 15 seconds and keep LTV at 99% of max LTV. In simple words: higher LTV = more UST borrowed = more revenue generated from Anchor borrowing incentives + more yield on borrowed UST (from Anchor Earn or other strategies). #### Safe mode It might happen that Nexus's price oracle would fail. In such case Nexus will have no time advantage vs Anchor - they will get the bAsset price information at the same time. In such scenario *Safe mode* will be used, decreasing the LTV to 80% of max LTV to reduce the risk of liquidation. #### Emergency mode In case of Anchor's price oracle failure, all liquidation processes on Anchor will be paused - no liquidations in that period. Unfortunately, as soon as the oracle starts working again, the prices provided might differ significantly vs last prices provided before failure. In those short moments after restart the risk of liquidations is significantly increased due to above circumstances. To mitigate that, *Emergency mode* will be used by Nexus, effectively decreasing LTV to 50% of target LTV. ### UST Mirror Vault Once the UST Mirror Vault is deployed, Nexus will be able to use the delta-neutral farming strategy on mAssets. The strategy can be implemented in a few variants, e.g.: * Deposit 2X amount of UST to Anchor Earn - get aUST * Provide aUST as collateral to mint and sell an mAsset (short position + short farming APR received) with LTV * Use another X amount of UST to purchase the shorted mAsset (long position) * Deposit purchased mAsset to mAsset-UST LP to earn farming rewards. * After 2 weeks, once the funds from shorting are unlocked: deposit to Anchor Earn * Summary: * Total investment: 4X * Total yield: 3X earning Anchor Earn yield (19.5%), X earning mAsset sLP yield (variable), 2X earning mAsset-UST LP yield (variable). Above description assumes LTV=200% in minting/shorting the mAsset, which is desirable for manual LTV management, and can result in APR of 30%-35%. In case of automated LTV management by Nexus, LTV might be set more aggressively, improving capital efficiency and resulting in even higher APR. #### Advantages of UST Mirror Vault 1. **Automatic selection of mAssets based on APR**\ APRs of mAssets vary in time - both for long mAsset-UST LP farm and for short mAsset sLP farm. Mirror Vault will take these APRs into account whenever new funds (from MIR rewards, from new deposits, from unlocked UST after shorting an mAsset, etc.) are allocated into the delta-neutral farming. Therefore the overall APR will be kept at a high level. 2. **Automated optimization of LTV for minted/shorted mAssets**\ Since LTV for shorted/minted mAssets will be managed automatically, it may be kept just above the liquidation threshold of 150%. For manual LTV management it is advised to maintain LTV of \~200%. Therefore automation will allow for \~33% better capital efficiency on shorting/minting mAssets, resulting in higher ROI. 3. **Automated MIR rewards claiming**\ The vault will operate with much higher UST amount than a regular investor. That will allow more frequent collection of MIR rewards as transaction fee will become less and less significant with growing vault TVL.\ In result, this will allow for auto-compounding of APR. ### EthNexus EthNexus will be an offering of Nexus Protocol for users of ETH on Ethereum blockchain.  Users will be able to deposit ETH to EthNexus. In the background, EthNexus will use ETH to mint bETH, bridge it to Terra blockchain and provide to bETH Anchor vault. Yield generated in Terra will be bridged back to Ethereum blockchain and paid out in ETH/stETH. Nexus Protocol team predicts that EthNexus might offer \~10% APR on deposited ETH, which is significantly higher than any offering currently available on Ethereum ecosystem. Since entire deposited ETH ends up as bETH on Terra, this will increase TVL on Anchor Protocol and value-capture for the Terra ecosystem. ## Team 6 persons are contributing at the moment (as per [Terra Project Spotlight](https://medium.com/terra-money/terra-project-spotlight-nexus-protocol-6d44a078c0d4)). Notable mentions: * Shimmy - admin on the Telegram group ## Partnerships ### Audit - Halborn Security Audit has been completed on 20 Sep 2021, report is available[ here](https://github.com/HalbornSecurity/PublicReports/blob/master/CosmWasm%20Smart%20Contract%20Audits/Nexus_Protocol_CosmWasm_Smart_Contract_Security_Audit_Report_Halborn%20v1.1.pdf). Vulnerabilities found: | Risk level | No. of findings | Remediation | | ------------- | --------------- | ---------------------------------------- | | Critical | None | N/A | | High | 3 | All remediated | | Medium | 1 | All remediated | | Low | 3 | All remediated | | Informational | 10 |2 remediated
8 acknowledged
| ## Tokenomics ### PSI Distribution - TOTAL | | Share | PSI Amount | | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------: | -----------------: | | Community Fund | 10% | 1,000,000,000 | | PSI-UST LP Incentives | 10% | 1,000,000,000 | | nAsset-PSI LP Incentives | 25% | 2,500,000,000 | | nAsset rewards | 5% | 500,000,000 | |Investment
Public sale:
25% of Pylon Swap
Team and Advisors:
PSI-UST LP
| 50,000,000 | | **TOTAL** | **525,000,000** | ### Value accrual - why is it good to hold PSI? There are 2 reasons to hold PSI tokens: 1. **Revenue from protocol fees**\ Each vault will have a *benchmark yield* defined, e.g. Anchor rate for the UST Mirror Vault. If the APR generated by the vault is higher than the benchmark, part of the excess will be split between vault depositors (yield) and the protocol (fee).\ Protocol fee will be used to buy-back PSI on the market (PSI-UST LP) and reward: 1. nAsset holders 2. PSI stakers 3. Community Pool 2. **Governance voting**\ A number of topics will be handled via PSI governance voting, including (among others): 1. Protocol fee rate\ \= part of excess yield (above benchmark yield) to be used for PSI buybacks 2. Tax rate\ \= part of PSI buyback that feeds the Community Pool 3. Whitelisting additional assets 4. Updating logic of yield optimizers 5. Setting performance benchmarks 6. Usage of the Community Pool 7. *Strategy Bounty* system parameters ### PSI token vesting | | Vesting | | ----------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | Community Fund | *not yet announced* | | PSI-UST LP Incentives | *not yet announced* | | nAsset-PSI LP Incentives | *not yet announced* | | nAsset rewards | *not yet announced* | |Investment
12 month cliff followed by 24 months of linear vesting
(total of 36 months)
0.5% release at TGE for initial PSI-UST LP
| | ANC Gov. Staking Airdrops | n/a | | Other airdrops | n/a | ## Launch **Token Generation Event (TGE):** 11 Oct 2021 ### Pylon Swap **When:** 5 Oct 2021\ **PSI tokens available for purchase:** 300,000,000 PSI\ **Price:** 0.01 UST per PSI\ **Max purchase limit:** *will be announced on 30 Sep 2021, after KYC closes*\ **Condition to enter:** complete KYC - [link](https://kyc.nexusprotocol.app/) to KYC form\ **Vesting:** 25% unlocked at TGE, remainder unlocked after 2 months ### Pylon Pools The only information available now is that there will be some PSI available in Pylon Pools. No more information has been disclosed yet (types of pools, allocations, durations, vesting, etc.) ### Airdrop to ANC governance stakers #### At TGE Amount: 100m PSI tokens\ Timing: at TGE\ Snapshot: *not taken yet - to be done in Sep 2021* With \~39m ANC staked (data from 27 Sep 2021), that translates to \~2.56 PSI per ANC staked in governance. #### Weekly airdrop Hourly snapshots will be taken over the 4 years after launch to calculate distribution of the weekly PSI airdrop to ANC governance stakers. My math tells me that: Total airdrop over 4 years = 1b PSI\ Airdrop - yearly = 250m PSI\ Airdrop - weekly = 4.79m PSI With current ANC staked (\~39m) that works out to 0.122 PSI per ANC staked. ### Airdrop to MINE governance stakers Amount: 50m PSI tokens\ Timing: *not yet announced*\ Snapshot: *not taken yet - to be done in Sep 2021* With \~258m ANC staked (data from 27 Sep 2021), that translates to \~0.194 PSI per MINE staked in governance. Initial PSI-UST LP $1m TVL will be provided as initial liquidity for the PSI-UST pair (likely: on TerraSwap). The listing price will be the same as Pylon Swap: 0.01 UST, which **only** means that initial composition of the LP will be: 500k UST + 50m PSI {% hint style="info" %} That composition might and will change as people start trading against it. It is very likely, that the price will increase, as it has already happened in case of ANC launch and STT launch. If you buy early, you might get rekt and purchase at an astronomic price rather than cheap. {% endhint %} ## Strategy Bounty Program As the Terra ecosystem grows and becomes more connected with other ecosystems (e.g. through IBC or Wormhole), more yield opportunities will arise. Nexus Protocol plans on creating a bounty program to reward community members that come up with new yield strategies to be implemented as new vaults. ## Beyond yield optimization and LTV management As described in the early post on Terra Agora, Nexus Protocol is targeting another market opportunity. Soon we can expect merchants to start accepting UST payments directly. With this, a new group of ecosystem participants will emerge - one that might benefit from delta-neutral strategies (e.g. UST Mirror Vault) and the high APR it provides. As such, these merchants would have an additional incentive to: * Start accepting UST in the first place * Keep part of the collected UST in Nexus Protocol to earn high yield * ## References * [Litepaper](https://nexusprotocol.app/Nexus_Protocol_Litepaper.pdf) * [Launch disclaimer document](https://kyc.nexusprotocol.app/nexus-disclaimer.pdf) * [TG message from Shimmy about TGE distribution](https://t.me/NexusProtocolTG/5240) * [Shimmy's responses to my questions on TG](https://t.me/NexusProtocolTG/7407) * [Post on Terra Agora](https://agora.terra.money/t/nexus-enabling-mass-adoption-of-ust-payments/1108)