Summary: BNB (BNB), previously also known as Binance Coin (BNB), is a cryptocurrency coin created and issued by the cryptocurrency exchange Binance. The main utilities of BNB are for trading discounts on Binance and as the gas token for BNB chains.
Chaos Labs has provided preliminary parameters for starting the market (updates to be done by security committee)
Front end provisioning done but not deployed
Provisions in place for synthetic or bridged market (Layerzero/stargate)
Move to Snapshot vote after forum discussion
Recommended Initial Paramaters
BNB
negativePositionPriceImpactFactor
3.8*10^-11
positivePriceImpactFactor
1.9*10^-11
priceImpactExponent
2.36
borrowingFactor
1.4*10^-8
borrowingExponentFactor
1
maxLongOpenIntereset/maxShortOpenIntereset
$10M
openInterestReserveFactor
0.75
reserveFactor
0.8
negativeSwapImpactFactor
1*10^-8
positiveSwapImpactFactor
5*10^-9
swapImpactExponent
2
Price Impact
Price Impact and OI caps were set similarly to the recommended SOL configuration due to a similar liquidity profile.
Borrowing Rates
Borrowing parameters were set using the linear model (As pool size is unknown), aiming for 32% APR at 100% utilization and 26.5% APR at 80% utilization. While these values are higher than other markets at time of launch, we aim to bootstrap liquidity fast, assuming traders are not very sensitive to high borrowing rates.
What are the pros and cons between a synthetic and bridged market? Synthetic pros being higher liquidity but lower allowed OI due to extra risks of operating a synthetic market. And bridged pros being lower operational risk (if higher wrapped token risk) and more challenging liquidity due to the need to bridge BNB?
But I meant a proper bridge security risk assessment, along the lines of what Uniswap Foundation did when they evaluated RFPs from various bridge operators.
There are many possible solutions, but in this case an aggregator may not be an appropriate solution since we are looking at doing a wrapped version of the token instead of settling cross chain bridging.
With BNB chain and Arbitrum not having significant overlap, it was important to engage with those protocols that are active on both chains to get a sense if there was a desirable standard. With Radiant (largest native lending protocol, having built on stargate/layerzero) there are potential synergies that are not available with other solutions.
In the event that a market backe with a wrapped token is setup (still to be determined by governance) it is notable that risks are isolated to that specific market and thus LPs more than anyone will be the ones determining their comfort.
Helpful thanks. Does this then effectively lock in one single vendor or is moving away possible (I don’t mean technically possible, but more how annoying would it be) in the off chance a better solution emerges?
It would be possible to have a separate BNB with a different version of BNB pair but from a UX perspective probably best to keep one single pool unless a solution comes that is vastly superior.
