from Osmocon Video Part 1: 36:30 - 51:18
tl;dr
-Membrane Protocol launching on Osmosis in September. Membrane is a CDP (collateralized debt protocol) that produces an asset with dampened volatility (like RAI) instead of a pegged stablecoin. This dampened vol asset will be good for providing collateral to lending and derivatives protocols. Users (and potentially treasuries) will be able to mint against Osmosis LP positions (and others in the future), and they will also be able to collateralize baskets of assets, which should be more robust than single-asset CDPs.
https://twitter.com/MembraneFinance
“Membrane is targeting a September 2022 launch, and will initially support @osmosiszone, with more chains following after.”
What is Collateral
-anything of value a lender can secure to protect themself from a delinquent loan
-for this talk: fungible tokens
Where do we use collateral in DeFi?
Derivatives
-still growing in the space, Perpetual Protocol (Ethereum), GMX (Avalanche & Arbitrum)
-collateral used as settlement
-longs, shorts, futures, options: you want to settle into a single unit (of robust collateral)
Lending
-borrow posts collateral
What makes good collateral?
-low volatility (vs. scary NFT’s as collateral)
-low trust / uncensorable (vs. centralized stablecoins)
-high scalability (need to be able to increase or decrease amount of collateral avail. for settling derivatives)
-ease of mint (vs. controlled by Circle)
Frameworks for Collateral
Centralized Stablecoins
-ZeroAuth not a fan, ‘a necessary evil’
-good at absorbing pressure, been reliable so far
-bad at transparency and trustlessness/composability
CDP Stablecoins
-e.g. DAI: place ETH in vault and mint DAI
-cons: Black Thursday: reflexivity (collateral has to be sold to maintain peg, decreasing collateral value, requiring more collateral to be sold)
Volatile Assets
-GMX has been successful in this bear
-uses volatile assets: BTC, ETH, and AVAX (GLP)
-scary for long-term collateral
Dampened Assets
-e.g. RAI — like a CDP
-put collateral in vault
-but their ‘stable’ is not pegged
-has not deviated by more than 6% from its median (or average?)
-weakness: only uses ETH, so it’s hard to scale