Piggy Finance AMA Transcript

A decentralized borrowing protocol that allows users to get interest-free loans

By
BSCNews
on
July 14, 2021
Category:
AMA

Andrew:

Hello everyone and welcome to the Piggy Finance AMA

Carl:

Hi everyone! It is good to be here!

Andrew:

Great, yeah so thanks for joining us

Before we begin, can you give us a little background information about you and your role at Piggy Finance?

Carl:

Sure!

Hi everyone, I am Carl, The Marketing Lead at Piggy.fi 

I have been in the blockchain / crypto space for around 5 years and I used to work with crypto exchanges.

But DEFI space is fascinating and actually has a huge potential, so thats why I am here!

Andrew:

Great, thanks for that introduction!

And yeah the DeFi space has that sort of power am I right? haha

So to start things off


1. What is Piggy Finance and what are you contributing to the BSC ecosystem with this project?


Carl:

Piggy's mission is to provide secure, zero-interest borrowing. We were inspired by the launch of Liquity and the problems with other lending protocols in BSC to bring the model of zero-interest lending to BNB holders. The protocol has been live for less than a month.

At Piggy, we offer zero-interest loans with the lowest collateralization requirements and maximum security. We believe many users are getting crushed by debt and face potential liquidation of their precious funds because they did not have a choice like Piggy, and so they couldn't correctly price how costly interest would be in this uncertain market.

With zero-interest loans, this is not a concern. That is why we believe Piggy will win the hearts and minds of BSC users in the end.🥰🐷🐽🐽

Andrew:

Okay thank you


2. For someone who may not be familiar with lending and borrowing protocols, can you explain what it is and how users can utilize your platform?


Carl:

For lending and borrowing protocol, usually it works like this:

1. User use a certain asset as colleteral, for example, $ETH

2. so lets say $ETH's current price is $100, with a collateral ratio of 110%, user can borrow $90 per $ETH.

3. but if the $ETH price got below $100, users are exposed to the risk of liquidation, not to mention interest, etc

4. User can repay his/her debt by redeeming back their asset

Piggy is actually super simple. To use it, just head over to https://bit.ly/3dr0DPM (piggy[dot]fi) and connect your wallet, you will be able to open a PiggyBank, deposit $BNB, and get your first loan in $PUSD. You can then deposit $PUSD in the Stability Pool to earn $PIGGY or exchange it for $BUSD in our DODO pool to open all the yield options available in BSC.

The key different will be, 0% interest rate, and the lowest Collateral ratio grant you felxibility to your plan!

Andrew:

Great explanation! Tried explaining lending and borrowing protocols with friends and could never explain it as good as that haha

Carl:

haha I am flattered!

Andrew:

So before we touch on that 0% interest

Carl:

Just remember, risk management is important!

Andrew:

Yes, as with anything in crypto users should dyor and not overextend


3. Can you explain the liquidation feature as well?


Carl:

To ensure that the entire stablecoin supply remains fully backed by collateral, PiggyBanks that fall under the minimum collateral ratio of 110% will be closed (liquidated).

The debt of the PiggyBank is canceled and absorbed by the Stability Pool and its collateral distributed among Stability Providers.

The owner of the PiggyBank still keeps the full amount of $PUSD borrowed but loses ~ 10% value overall hence it is critical to always keep the ratio above 110%, ideally above 150%. (better 200%)

And anyone can liquidate a PiggyBanks soon as it drops below the Minimum Collateral Ratio of 110%. The initiator receives a gas compensation (20 $PUSD + 0.5% of the PiggyBank's collateral) as reward for this service.

The 20 $PUSD is funded by a Liquidation Reserve while the variable 0.5% part (in $BNB) comes from the liquidated collateral, slightly reducing the liquidation gain for Stability Providers.

The liquidate fund will reward to the users who support our stability pool, lets go through that later!

Andrew:

Ohhh gotcha, so with that feature on your protocol, anyone can liquidate

Carl:

and rewarded!

Andrew:

So I'm sure lenders are more than happy to (painfully) liquidate the whales

Carl:

hahaha well that's pie for everyone to share!

Andrew:

Hahaha yes


4. Can you explain to us the mechanisms that allow a 0% interest when borrowing assets as well as low collateral ratios?


Carl:

Sure! A lot of people must be wondering who it works and how the protocol generate revenue!

Piggy.fi charges one-time borrowing and redemption fees that algorithmically adjust based on the last redemption. For example: If more redemptions are happening (which means $PUSD is likely trading at less than 1 USD), the borrowing fee would continue to increase, discouraging borrowing.

Other projects require variable interest rates to make borrowing more or less favorable, but do so implicitly since borrowers would not feel the impact upfront. Given that this also needs to be managed via governance, Piggy instead opts for a fully decentralized and direct feedback mechanism via one-off fees.

Every time you draw $PUSD from your PiggyBank, a one-off borrowing fee is charged on the drawn amount and added to your debt. Please note that the borrowing fee is variable (and determined algorithmically) and has a minimum value of 0.5% under normal operation.

The minimum collateral ratio (or MCR for short) is the lowest ratio of debt to collateral that will not trigger a liquidation under normal operations (aka Normal Mode). This is a protocol parameter that is set to 110%. So if your PiggyBank has a debt 10,000 $PUSD, you would need at least $11,000 worth of $BNB posted as collateral to avoid being liquidated.

It is recommended to keep the ratio above 150%!! 🐽🐷

Andrew:

Okay thank you! So while on the topic of $PUSD


5. What native tokens does your protocol have? How are they used on your platform?


Carl:

Our Token is called $PIGGY,  It captures the fee revenue that is generated by the system and incentivizes early adopters.  Holders can stake their tokens to earn the fees generated by loan issuance and $PUSD redemptions.

$PIGGY has a max supply of 100,000,000 and act as a governance minimized token.

A good use case is the voting we hosted recently:

https://snapshot.org/#/piggyfinance.eth/proposal/QmStN9HS3uKkQNpz59J2GB3unzis4Vg7YK6g5aZ4xUXroL

That we allow Piggy holders to vote for our next LP mining scheme.

Andrew:

So for a user to lend on Piggy, what asset would they need to stake?

Carl:

$BNB for now, but more will be available in the future!

Andrew:

Gotcha, thanks for that clarification


6. Tell us more about your stability pools.


Carl:

Sure! The Stability Pool is thecore of the ecosystem,  in maintaining system solvency. It achieves that by acting as the source of liquidity to repay debt from liquidated PiggyBanks—ensuring that the total $PUSD supply always remains backed.

When any PiggyBank is liquidated, an amount of $PUSD corresponding to the remaining debt of the PiggyBank is burned from the Stability Pool’s balance to repay its debt. In exchange, the entire collateral from the PiggyBank is transferred to the Stability Pool.

The Stability Pool is funded by users transferring $PUSD into it (called Stability Providers). Over time Stability Providers lose a pro-rata share of their $PUSD deposits, while gaining a pro-rata share of the liquidated collateral. However, because PiggyBanks are likely to be liquidated at just below 110% collateral ratios, it is expected that Stability Providers will receive a greater dollar-value of collateral relative to the debt they pay off.

Details:

To summarize:

1. Stake $PUSD on stability pool

2. Gained $PIGGY, and $BNB as liquidated collateral

Andrew:

Side question to this

Carl:

YUP!

Andrew:

the 7 day apy on your stability pool is 122%. Are you saying that it is possible for users to potentially earn this rate within a week?

Carl:

That is the average number we calculate based on the past 7 days, that number may change according to couple of factors:

1. Volatility of $BNB (as it affect people's position got liquidate or not)

2. How many Piggy banks got opened in that period

Andrew:

That's awesome!


7. Can you tell me more about the mining feature on Piggy Finance?


Carl :

Sure!

So instead of the stability pool for users to stake $PUSD,, currently we have 1 Staking pool:

$PIGGY Pool - stake the Piggy Token to share the borrowing and redemption fee.

The pool is to incentivize the $PIGGY holders.

As you may have notice, we used to have a LP mining pool on PancakeSwap and DODO, for PIGGY/BNB and PUSD/BUSD pair, which was a 7 days campaign, but as we have mentioned, we are starting the 2nd wave soon, details:

Your $PIGGY stake will earn a share of the fees equal to your share of the total $PIGGY staked, at the instant the fee occurred.

Andrew:

Okay awesome!

Is there a reason it is only in waves?

And not a permanent feature?

Carl:

You know since we are a young project, we always wanna listen to the feedback from the community, we wanna be flexible and open the pools people desired!

Andrew:

Oh, gotcha

and sorry I missed a side q that I had down

in terms of the stability pool, you stake $PUSD. And $PUSD is only obtained from putting BNB as collateral correct?

Carl:

Or you can swap with BUSD from DODO~

Andrew:

Gotcha, thanks just wanted to get that information out there for the community haha

So this next topic is something that I personally love


8. What are the predictions features? In terms of sports betting, is this feature mostly going to contain pick ‘ems or will you be incorporating parlays, over/unders, etc.


Carl:

Oh this one is my favourite!

Prediction

For all you guys check out this cool feature!

So this is our brand new feature allowing users to make prediction on certain topics, we had hosted COPA AMERICA and EURO 2020.

The latest one is NBA Game 4, Bucks vs Phoenix, which expire in 9 hours.

We have some internal discussions around the topics, but we are always open to feedbacks and comments from the community.

In the future, olympic games is something we wanna add to the feature as well, and of course, may be Major Coins price prediction?

Andrew:

That sounds great! Especially with the Olympics right around the corner


9. Would users be able to borrow to take part in the predictions feature?


Carl:

Of course and they are actually encouraged to do so! For that, simply open a PiggyBank to borrow $PUSD, use it to bet, win, and repay with the profit!

Andrew:

Piggy Finance is the new Vegas!

Carl:

No gambling, just prediction to support your favourite team!

🥰🥰🥰

Andrew:

Exactly

So last but not least


10.  Any exciting news you’d like to announce for us here today?


Carl:

Of course! A few key note I would like to address here:

1. We are in touch with a lot of Wallet apps, and we are being added to the wallet apps, like Math Wallet, Imtoken, SafePal 

2. LP mining scheme 2 is just around the corner!

3. And everyone is concern about us listing, all we gotta say is, it will be coming soon in a very short period of time

4. We receive the Audit report from Certik:

Andrew:

Wonderful, and can you drop links to your social media accounts that everyone here can go give a follow?

Carl:

if you would like to know more about Piggy Finance! here are some useful links for you:

Official Website:

Telegram:

Twitter:

Docs:

Discord:

Andrew:

Thank you Carl for answering those questions!

I know you're a busy man so we'll wrap it up here but great project that we learned a lot about here today

Looking forward to seeing future developments for Piggy!


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