Liquidity Deposit Limit in the Stability Pool


The Cardano Indigo protocol has been created to allow for the creation of synthetic assets, such as BTC, ETH, or USD. To keep the price of these synthetic assets stable, a stability pool has been created where leveraged traders can liquidate their positions in case the price deviates from the underlying asset’s price. Currently, 47.5% of all synthetic USD is in this stability pool (for example). Additionally, each Cardano epoch (every 5 days), stability pool participants receive INDY governance tokens and other benefits.

My Proposal:
To prevent the Indigo stability pool from being solely used to generate these benefits and to give more usage to the protocol’s synthetic assets, I propose implementing a maximum liquidity deposit limit (for new depositors only, so as not to affect those who already have their liquidity in the pool). This would limit the amount of liquidity that participants can add to the pool and give more utility to all the synthetic assets such as using them for DEX, CEX, Lending, leverage, exchange, etc.
I propose three options for liquidity deposit limits:

40% limit: If the stability pool reaches 40% of its maximum capacity, no one can add more liquidity until the pool is partially emptied.

45% Limit: If the stability pool reaches 45% of its maximum capacity, no one can add more liquidity until the pool is partially emptied.

50% Limit: If the stability pool reaches 50% of its maximum capacity, no one can add more liquidity until the pool is partially emptied.

If the stability pool is below any of these three limits, any participant can add liquidity and receive all corresponding rewards (as if it were a competition).

Implementing a maximum liquidity deposit limit in the Indigo stability pool can help the usage of all synthetic assets in the protocol. I propose three options for a maximum liquidity deposit limit.

Note 1: if you have suggestions you can comment them, if you disagree you can propose new limits.

Note 2:

stability pool BTC- 79.67%
stability pool ETH- 75.66%

These percentages are the current (today’s) amount of assets held by the stability pool.

  • 40% Limit
  • 45% Limit
  • 50% Limit
  • No Limit

0 voters

NO NO NO!! Are you selfish? we need to bring liquidity in the protocol and new people will find this off putting so no! chance! are you trying to ruine the protocol = vote NO!!

All the opposite sir, imagine if I wanted to or could I add 200k USD and create iUSD iBTC iETH and ask for a Collateral 170% and all dividends in ADA and add it to the stablity pool (I would not take that risk), and what I would do is sell and from selling more INDY to buy more, iUSD iBTC iETH and thus liquidate my debts, and then exchange it all for Cardano. But I will have depreciated INDY.

This proposal seeks is that this created capital, migrate to other protocols such as AADA, LQ, MINSWAP(stablecoin pool) etc. etc. etc… And that it is not only in Stability Pool.


1-600k ADA in Minswap let’s say you pair you and other iUSD and DJED for 2 weeks and you have farming, plus fees and you earn is in MIN, iUSD and Djed plus no INDY.

2-in AADA You lend your iUSD, iBTC, ETH, and you earn a return for lending in AADA and in interest that you collect. (TODAY YOU CAN DO THIS even you can self borrow to earn AADA, well That last one if I don’t know, I will try)

3-in LQ, you add liquidity in these 3 synthetics and you earn in LQ and interest.

Without capital for those 3 examples, that won’t happen.

now you have 3 options 50% 45% 40%, don’t you like it? You can propose or just put NO.

In the meantime I will keep selling INDY to have more Djed.

Behind this proposal I have another one that with this proposal seeks to raise the value of INDY. But I am getting discouraged to share it.

the issue most of us are having is the fact you are saying we should tax the new guy high which is unfair! Now if we raise to a reasonable threshold and have a lower minimum than what you saying, i am sure everyone will be happy!

we also need to take in consideration if people swap there wallets they will have to pay a lot of money you are suggesting. the future original members are going to end up fighting with members of the community!

yes i agree we have to have fees to help keep value in the indigo protocol! but not high taxation because this high tax is causing argument and people to sell off indigo.

Behind this proposal I have another one that with this proposal seeks to raise the value of INDY. But I am getting discouraged to share it.

Please do share the idea but please lower those fees! why would you charge members 40% ?? Why not 10 or 20%

Close this and redo it with a way lower fee please

No sir!, I no longer propose anything here. Arrogant!

Study and learn economics before insulting and criticizing.

Know your money first, seriously! Know it so your brain understands what I’m saying.

I know economic sir, The problem is you are asking for us to tax new members a high amount. But if we don’t attract new users the system cannot grow as we would like! Especially because cardano as an ecosystem is early

I think maybe you didn’t fully understand my proposal or the translator didn’t translate it correctly. Let me explain it in more detail.

My proposal is that if the stability pool uses more than 50% of the total debt of a synthetic, like iBTC, then no one can add more liquidity to the pool. However, once the iBTC is liquidated and the stability pool is below 50%, anyone can add more liquidity.

Additionally, there are other proposals for the stability pool to use 40% or 45% of the total debt, which would increase returns as liquidity decreases. This could even incentivize people to take on debt to add liquidity to the pool, since if it goes unused, the debt can be held or returned.

This system would be highly competitive because, with less liquidity in the stability pool, those synthetics can be added to other protocols, which would increase profits. Also, it’s important to note that the rewards in INDY would increase significantly as liquidity in the stability pool decreased.

In summary, my proposal aims to encourage competitiveness and increased profits by allowing anyone to add more liquidity to the stability pool once the synthetic has been liquidated and the pool is below 50%. Additionally, by reducing liquidity in the pool, returns can be increased and participation in other protocols can be encouraged. I hope this clears up any confusion you may have had.

I want to clarify that this is a proposal and I am not directing the project. If you don’t like the idea, you are free to vote against it. However, let’s keep the communication respectful and free of rudeness. The way you express yourself says a lot about your education and respect towards others.

And yes, I am an economist, and not a small one.