Horizon Academy
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  • Horizon Academy
  • Horizon Protocol
    • Introduction
      • Tokenomics
      • Business Model
      • Synthetic Assets - zAssets
    • Security Audit
    • Community
      • How to Initiate a HIP
      • HIPs
        • HIP-23 Revenue Sharing Model: Intent-based System Phase one
        • HIP-22: Create a zUSD - USDC pool on Pancakeswap V3
        • HIP-21: Stop Incentives to the zBNB - BNB pool on Wombat Exchange
        • HIP-20: Suspend zMATIC Market and Introduce zPOL Ahead of MATIC to POL Migration
        • HIP-19: Temporarily reduce C-Ratio to 350%
        • HIP-18: Add DOGE and SHIBA to Horizon Futures
        • HIP-17: Add DOT, AVAX, and MATIC to Horizon Futures
        • HIP-16: Add XRP, ADA, and LINK to Horizon Futures
        • HIP-15: Add SOL to Horizon Futures
        • HIP-14: Reduce Trading Fees during Horizon Futures Promotional Period
        • HIP-13: Suspend zNVDA market ahead of Stock Split and convert zNVDA to zUSD
        • HIP-12: Updated Utilization of zUSD & zBNB Liquidity
        • HIP-11: Redirect HZN from EARN Pool to PancakeSwap as ‘Bribe’ using Cakepie
        • HIP-10: Use zAssets from Community Fund staking to provide liquidity on Wombat via Yield Aggregator
        • HIP-9: Redirect HZN from EARN Pools to Wombat Exchange as ‘Bribes’
        • HIP-8: Move the zUSD-BUSD and zBNB-BNB Liquidity Pools to Wombat Exchange
        • HIP-7: Utilize the Community Fund for Additional Liquidity
        • HIP-6: Lower Target C-Ratio to 600% from 700%
        • HIP-5: List New zAssets
        • HIP-4: Use Keepers to Close Weekly Fee Periods
        • HIP-3: Suspend zTSLA ahead of Stock Split
        • HIP-2: Lower Target C-Ratio to 700%
        • HIP-1: Create incentivized zBNB/BNB pool
      • Community Grant Program
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  • Stake & Earn
    • Introduction
    • Staking on Horizon Protocol
      • Staking and Rewards
      • Mint, Burn, and Claim
      • Collaterialization and C-Ratio
      • Liquidation
      • Managing Risk
      • C-Ratio Strategies
      • Hedge your Portfolio
    • Interfaces
      • Account - Escrow
      • Account - Authorize
      • Account - History
    • Guides
      • How to Stake by Minting zUSD
      • Adding Liquidity for zUSD and zBNB pools
      • Add Liquidity for HZN-BNB
      • Remove LP Tokens for zUSD-BUSD Pool
      • Setting Up Chainlink Automation
  • Educational Articles
    • Glossary and Definitions
    • What are DeFi Derivatives and how are they used
    • A Brief History of Synthetic Assets and Financial Derivatives
    • DeFi Derivative Projects
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  • Summary
  • Specification
  • Motivation
  • Potential Risks
  • Considerations
  • Feedback & Questions
  • Updates:
  1. Horizon Protocol
  2. Community
  3. HIPs

HIP-7: Utilize the Community Fund for Additional Liquidity

By staking HZN to mint zUSD, but not claiming the weekly reward

PreviousHIP-8: Move the zUSD-BUSD and zBNB-BNB Liquidity Pools to Wombat ExchangeNextHIP-6: Lower Target C-Ratio to 600% from 700%

Type: Horizon Improvement Proposal Date: Oct 27th, 2023 Status: Draft 2 | Completed

Summary

Allocate a portion of the community fund for staking to bolster zAsset liquidity on DEXs, while not claiming the weekly rewards.

Specification

  • Stake the HZN at the Target C-Ratio and mint zUSD

  • Do NOT claim the weekly reward to allow the unclaimed rewards flow back into the global rewards pool

  • Utilize the zAssets for the zUSD and zBNB liquidity pools

Motivation

The main motivation for this is to boost the liquidity of our liquidity pools in preparation for:

  • The launch of Loans

  • Additional partnerships (i.e. DEX aggregators)

Furthermore, staking the Community Fund’s HZN will also boost our protocol's total value locked (TVL).

Potential Risks

The implementation of this HIP might come with some risks, including the following:

  • In the first week of the implementation, existing stakers will see lower rewards and APY than normal due to the protocol automatically distributing rewards for the new HZN being staked. In the second week, the rewards will be normalized again as the unclaimed rewards from the first week will be distributed back to everyone in the second week.

Considerations

Additional thoughts we should take into consideration:

  • The amount of HZN used is subject to the liquidity needs of the protocol while also not overexposing the community fund. 15 million HZN is proposed as a starting value that can be adjusted to be higher or lower as needed over time.

  • A specific wallet will be dedicated to staking the community fund.

Feedback & Questions

Updates:

Initially move 15M HZN from the to a new Community Fund Staking Wallet

Maintain at least a 300% C-Ratio to avoid

The launch of the

Increased zAsset liquidity on the open markets brings substantial benefits to all users of our protocol. It will reduce slippage, ensuring more favorable trading prices for our on-off ramps, stabilizing the , and facilitating more seamless trading for both existing and new users.

The C-Ratio will have to be watched and maintained to prevent liquidation, but since no rewards will be claimed, on target is not necessary. The protocol will take action to restore the C-Ratio if it falls below 300%.

In preparation for HIP-10 where we provide liquidity on Wombat Exchange, we plan to use the zAssets obtained from staking the Community Fund to provide liquidity in the form of zUSD and zBNB. zUSD and zBNB are dominant assets in , but the additional zUSD and zBNB from the Community Fund might affect the token distribution in the global debt pool. If there are any changes in the global debt pool, the approach can be adjusted accordingly to align with the token distribution in the global debt pool.

Please ask your questions .

Ecosystem and Community Fund
liquidation risk
Futures Exchange
zUSD peg
maintaining the Target C-Ratio
the global debt pool
here
LogoUpdate: zUSD and zBNB Pools Migration & Community Fund StakingMedium