This brainstorming proposal is for a YAM Savings Account. This product would be integrated into a YAM lending/borrowing platform and the YAM rage quit function that the community are already considering/implementing.
The general idea is:
- Deposited interest earning YAM on a lending/borrowing exchange could also borrow against ragequit value
- Lenders that are borrowing against their YAM could use their borrowed value to purchase YAM and deposit it to be lent out to earn more interest
I propose to build a very simple and user friendly frontend called a YAM Savings Account accompanied by a smart contract backend that when the user deposited YAM would automatically borrow against rage quit value, purchase YAM and deposit it to earn additional interest for the user.
Pro: This could result in additional utility for YAM and is also something YAM is uniquely able to do, I think a YAM savings product is very on brand for us
Con: Complexity increases risk of system failure due to liquidations
Some additional options to consider:
- Borrowers utilizing the YAM Savings account to borrow against rage quit value could borrow at a 0% interest rate, while borrowers borrowing against rage quit value through the lending/borrowing platform would incur a small interest rate that would accrue to the ragequit pool providing self sustaining growth for the pool **Note that borrowers using the lending/borrowing platform would do so because they would be able to use their borrowed funds as they please, whereas if the YSA is used, the borrowed value is automatically used to purchase YAM and lend out to earn more interest.
- A fee on exit could be implemented that would accrue to the ragequit pool, also providing self sustaining growth
Now someone tell me this won’t work and why.