An update to xGov #84
In xGov session 2, we applied for a grant to develop various components aimed at enhancing the Algorand DeFi ecosystem. Our proposal consisted of three key parts, each with an estimated development cost in ALGO:
- Stableswap and Lending Markets Aggregator Integration (100k ALGO)
- Decentralized Liquidity Aggregator (100k ALGO)
- Decentralized Lending Platform (150k ALGO)
Source:
https://github.com/algorandfoundation/xGov/blob/main/Proposals/xgov-84.md
We’re pleased to announce that the first two components are now live and fully operational on MainNet. However, after undergoing a thorough legal review of the third component, we have made the difficult decision to place it on indefinite hold.
The decentralized lending platform carries potential legal risks, primarily due to the current lack of regulatory clarity. The platform was designed to allow users to take leveraged positions, with liquidations initially enforced by us to prevent bad debt from being absorbed by the protocol. This introduces significant centralization concerns, which we believe could attract regulatory scrutiny.
Additionally, prior enforcement actions against similar protocols on Algorand (like Deridex) raised further red flags. Given these risks, especially considering they could jeopardize the rest of the project, we believe it is in our best interest to pause development.
We have informed the Algorand Foundation of our decision and have mutually agreed to forgo the second payment of our xGov grant (175k ALGO). This includes accepting a 25k ALGO shortfall as a penalty for not fully delivering on our initial proposal.
As a gesture of goodwill, we have also decided to open-source a significant portion of the repositories from this project. Since the community took a chance on us, we believe this is the least we can do to provide value back.
You can find all the work done so far in our Open Source GitHub repository:
https://github.com/vestigefi/OpenSource
We remain interested in this project and, should the regulatory landscape improve in the future, we would be eager to revisit it.
