FIP#40 Astaria <> FloorDAO Partnership

Partnerships
1

Astaria<> FloorDAO proposal

FIP#40

Summary:

Astaria is a novel NFT lending platform that is nearing a public launch.

Our aim with this proposal is two-fold.

i) Support DAOs and projects that have NFTs as part of their treasury portfolio with financing options. There is a growing need for the NFT ecosystem as the maturity of the NFT markets emerges.

ii) Provide and sustainable market to earn yield in the NFT lending market—more on how Astaria can help in the motivation section.

Astaria is currently in development and will launch in the coming months. FloorDAO can be one of the launch partners.

Astaria believes in creating a more attainable financing protocol for borrowers. The average APR for these loans is still astronomical compared to the ERC20 market - currently sitting between 25% to 55%. Astaria believes in creating a more attainable financing protocol. We aim to add a level of competition in the market to bring the rates to a more sustainable level; we do this through our 3-actor model.

The 3-actor model is a model that allows borrowers (1st actor) and lenders (2nd actor) to interact with each other through a smart contract. The 3rd actor writes the terms of loans, the strategist. Strategists earn a percentage of all fees paid to their vault. More information about the 3 AM can be found here.

The Ask:

Astaria is looking for a strategic partnership in which FloorDAO provides liquidity to the Astaria lending vaults. In addition, FloorDAO can act as a strategist in the Astria ecosystem, enabling it to provide terms for collections that the DAO sees as essential to partner with (e.g. Miladies, Art Block, etc.)

The benefit to FloorDAO is that it will earn yield from the strategies they write. In addition, the DAO can use their position as a strategist to offer new collections a liquidity market, giving FloorDAO an advantageous position.

Regarding numbers, it is difficult to pinpoint a specific number to request at this pre-launch stage. However, to size the market, there is roughly $2,000,000 of loan origination per day. Astria hopes to gain 30% of this market within the first three months of launch. Making our goal to obtain ±$660,000 of loan origination per day. We expect our other strategists to provide liquidity to vaults.

Since we are also a new protocol, with us needing a growth curve, we expect less liquidity at the start. The below schedule is a realistic breakdown of what we expect liquidity provision to look like.

Month 1: $100,000 starter liquidity

Month 2: $300,000 provisioned liquidity to be added to the vault should demand to necessitate the extra funding

Month 3: Use the data from months 1 and 2 to submit a longer-term proposal based on demand and returns.

All liquidity should be based in ETH. It is also worth noting that all funds used in the vaults will be owned and controlled by the FloorDAO vaults, over which you have control.

Motivation

The growth of the NFT space will be supported by practical DeFi applications that give users fair financing options.

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The average daily loan origination has grown from $300,000 to over $2,000,000 per day in the past few months. We have now crossed well over $1billion in loan origination. The market continues to grow, as seen from this Dune Dash.

We are also aware that the market is becoming competitive. Astaria’s benefit over the other protocols is to offer a more scalable solution where you, the strategist, are still in command.

Proposal benefits:

At launch, FloorDAO routes liquidity in Astaria vaults. The vaults work in a similar way to standard DeFi vaults. The size of the commitment is up to the community. FloorDAO still controls all funds in Astaria vaults.

FloorDAO proposes a set of collections for Astraia to support on an ongoing basis. Astaria and the community can create a proposal, voted for in governance, regarding which collections FloorDAO can add to its vaults.

The addition of new collections can serve as a reinforcement of current FloorDAO relationships. Giving current collections an extra bit of utility. It can also serve as a valuable add-on to FloorDAO’s offering to future collections looking to work with the DAO.

Thank you for your consideration. Questions, comments and suggestions are welcome.

Feel free to contact me directly if you want to discuss more.
Telegram: @chandlerdk

Email: chandler@astaria.xyz

More information about Astaria:

Specific information:

How Astria works

The three-actor model

More general info:
Astaria Github

Astaria docs

Astrai Twitter

1 Like
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Hey Chandler thanks for kicking off the discussion. I’ll post here what I asked in the Discord.

  • how does the supply side terms work - is it all fixed rate/fixed length?
  • how much operational overhead is there? as the market gets more competitive will there need to be regular adjusting/reviewing of terms?
  • you recommended the ETH supply route, what are the opportunities on the NFT supply route? NFTX vault tokens or whole unit 721s.
  • what’s the state of audits for Astaria?

Additional question: FloorDAO would be taking on some extra risk here and helping Astaria with its initial TVL, is there any additional yield the DAO can expect for taking the leap here?

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Great questions

  • Supply side will be to your vaults, vaults work on an epoch system. You can withdraw funds at the end of an epoch, thus making it a fixed-term deposit that auto-rolls. All yields will be added to the vault LP shares.

  • The overhead is as much or as tiny as you want it to be. Our tech can ingest terms as quickly as 5min intervals or if you want to update once a week, that works. The system can be set up to whatever your team can do. We have created a simple SDK interface for all strategists to use.

  • We recommend ETH to start since that is what holders want to borrow. That being said, we can support any ERC-20. We’d be open to expanding the token offering if there is demand.

  • We have 6 audits, currently compiling our audits into our docs site. Our audit partners have been, Spearbit, Code4Arena, Runtime Verification, Sherlock

(I mentioned the above in the partnership Discord channel).

As for the additional question:

We are focused on launching the Astaria product and believe that the NFT finance space will grow, with our product helping that eventually happen. We also believe our launch partners will share in the upside success as the main focus of Astaria is to create an avenue for teams like Floor to realise revenue.

1 Like
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Personally I’m against allocating any liquidity to Astria or any other partnership until we’re able to get Floor’s market cap in line w/ its treasury value. That’s where I think our liquidity and idle capital should be spent.

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The market cap / treasury value is a different conversation imo, and I think it is detrimental to the DAO to allow that to impact on other potential relationships and strategies in the space.

In fact, partnering with Astaria with this proposal will help raise the profile of Floor with the potential of more token holders to come on, especially if there can be some co-marketing along side.

I’ve got another question @chandler-astaria

FloorDAO can act as a strategist in the Astria ecosystem, enabling it to provide terms for collections that the DAO sees as essential to partner with (e.g. Miladies, Art Block, etc.)

  • How much time and what skill sets are required to create these kinds of strategies? It may be a “how long is a piece of string” kind of question, but some guideance on the efforts/skills and if it’s a one off or ongoing management requirement.

There was also a question in the discord which I commented on with relation to the proposal so I wanted to capture that here as well. When asked what I thought about this proposal

I like it. I’m risk adverse though so I’m always concerned about allocating a large portion of the treasury towards new endeavours. I believe their approach won’t have the same 30% APR’s that payday loans has, because their repayment interest would be much more fair - but that should then generate more utility which in turn creates more fees.

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Thanks for the response here @javery

  • Running a strategy is as complex or as simple as you want. Astaria hopes to create a competitive environment so that Floor will need to manage its terms actively if they want to be competitive in the market. I’d liken the effort to actively managing a UNI V3 LP position.

  • While the magnitude of the amount being asked can be changed, I think the direction of the partnership is still valuable. In pure return terms, you can expect some yield -how competitive those yields are to be determined. What is of value is to position FloorDAO can be in when a new project wants to partner with you. As part of that offering, you can quickly spin up a lending marketing for that token, increasing its utility.

I personally believe that with a lending market, NFT holders have a lot more incentive to hold onto their tokens and access liquidity through lending markets. The true value of the Astaria<>Floor partnership is not in the size of the liquidity we are asking for, but instead the tools we can offer teams like yourself is to be in a position to add utility to new NFT projects.