Q&A: MYSO Finance Wants To Bring Zero-Liquidation Loans To The $Ape Ecosystem With This Ape Improvement Proposal
The ApeCoin DAO is voting on an Ape Improvement Proposal this week that hopes to bring ‘zero liquidation loans’ to the $ape ecosystem.
AIP-363 titled “Unlocking $APE’ potential: Building a credit market with MYSO Finance,” is an ecosystem fund allocation proposal written by ApeCoin DAO Contributor and MYSO Operations and Partnerships Lead Dominic.
In this AIP, Dominic explained that MYSO Finance is building a new peer-to-peer lending and borrowing protocol using Zero-Liquidation Loans that will give the ApeCoin DAO the opportunity to be long on $Ape while also allowing the $Ape community to borrow without the fear of being liquidated.
In AIP-363, Dominic proposed that the ApeCoin DAO allocate $750,000USD worth of $Ape to the Governance Working Group, enabling them to lend $Ape to community members on MYSO.
“We propose the creation of a lending market for $APE, utilizing MYSO’s v2 protocol,” Domic wrote. “This initiative can offer community members access to non-liquidatable loans, thereby enhancing the utility of the $APE token. If there is confidence in the continuous growth of $APE and a desire to offer more incentives to $APE token holders, establishing a non-liquidatable lending market is an effective way to achieve this objective.”
To find out more about MYSO’s ZLL loans and the impact they would have on the $Ape ecosystem, the Bored Ape Gazette reached out to the MYSO Finance team for an interview. Take a look at it below:
1. In a sentence or two can you sum up what your AIP is all about?
“AIP-363 is about creating loan facilities for Ape holders, ie allow Ape holders to borrow stables by using Ape as collateral. Note, we also have a 2nd proposal, ie AIP-389 which is about generating competitive yields by lending Ape via covered calls.”
2. Can you tell me a bit about Myso? When and why did you start?
“MYSO is a DeFi protocol specialized in bespoke loan and covered call solutions. We started MYSO to create a Million Yield Structuring Opportunities (MYSO), ie give users access to sustainable real yield sources. We've worked together with several DAOs, treasuries and whales, like Telos and Evmos, helping facilitate over $1.2m in covered call volume. MYSO originated as a finalist at the ETHOnline hackathon in 2021, after which we did a seed round of $2.4m with several institutional investors like Wintermute, Nexo, HashKey and GSR. Our team consists of 5 core contributors with a mixed background in financial engineering and software development.”
3. Can you please explain how a zero liquidation loan would be set up with $Ape?
“The idea would be to use part of the Ape treasury to swap into stables and seed a Ape community-owned lender vault that offers loans back to the Ape community. Ape coin holders could then use their Ape as collateral to borrow stables. The loans would be liquidation-free, meaning that even if Ape coin collateral value falls below the debt owed there wouldn't be any liquidations triggered. The downside risk would be borne by the Ape community-owned lender vault, where essentially defaults would implicitly work like a buyback mechanism of Ape. Loan parameters like tenor, duration and rates could be defined by the community, respectively, a Ape loan council.”
4. Other than the fact that the loans cannot be liquated, how else are ZLL loans different when compared to traditional peer to peer defi loans?
“Key differences are: no liquidations; fixed interest costs (ie high predictability without any APR swings) and fixed tenor/duration.”
5. Why is a ZLL loan better from the DAO’s perspective than a traditional loan?
“What makes a ZLL particularly interesting for DAOs is that they not only provide liquidity to the community but at the same time they also function like a buyback mechanism where in case of loan defaults the Ape DAO would essentially be reacquiring Ape back, which can serve as a strong market signal and provide a positive price resistance level.”
6. Do you have anything else you’d like to add or say?
“Its worth highlighting that we're currently launching the MYSO token, with our first airdrop having been announced very recently, some Ape holders might also be eligible. We're excited to work together with the Ape community and also have a second proposal live, ie AIP-389. MYSO is a very powerful protocol that enables multiple use cases, ie not only bespoke loans but also covered calls. We want to be useful to the Ape community and think both of these proposals are unique and can add great value to the community.”
The window to vote on AIP- 363 is currently open and ApeCoin DAO Contributors have until Wednesday, May 1st, to cast their coins and vote on this Proposal.
