Add New Assets - Harmony

WePiggy - Harmony enables users to deposit and borrow digital currencies through the pooling of funds. The user deposits the underlying currency, receives the pToken issued by the protocol according to the current exchange rate (for example, 1:50), and when withdrawing it, obtains the principal and interest according to the new exchange rate. Each loan is secured by a collateral acting as a risk mitigation tool against default. As the means of exchange, currencies are central in WePiggy - Harmony non-custodial lending operations.

Given the specificities of WePiggy’s model, the selection of currencies has been performed with the following constraints:

1. Each additional currency will slightly increase the gas cost of the borrow, redeem and other actions permanently.

2. Each currency added to WePiggy - Harmony protocol as collateral increases the protocol risk of insolvency. From a financial (balance sheet) perspective, the assets of WePiggy - Harmony protocol are the collaterals, while the liabilities are the loaned amounts. The underlying currencies of assets and liabilities often differ, with loans mostly taken in stablecoins and backed by volatile tokens. This means the protocol is heavily exposed to the failure of supported token systems as well as market fluctuations.

3. A centralised currency accepted as collateral exposes the protocol to its centralisation risk. The single point of failure risks of underlying currencies flow into WePiggy - Harmony protocol.

4. Currencies only enabled for depositing and borrowing (not usable as collaterals) present lower risk for the protocol. Collaterals are the assets of the protocol. To remain solvent, these assets must remain greater than the liabilities, the loans. Currencies which can only be used for borrowing should always be excessively backed by other currencies as the collaterals.

5. Having volume from different currencies in our lending pools reduces risks via diversification benefits.

When adding a currency to the protocol, significant controls are required to ensure the currency will add more value than risk.

In most cases, only currencies with a worthy product and significant community are considered.

The following currencies have been considered: