### Proposal Summary

Parallel team proposes to add ASTR both as a borrowable asset and as collateral to Parallel Money Market. This addition will bring significant exposure to Parallel Money Market from the huge Astar community, improve the connection of the Dotsama ecosystem, and further drive the DOT related economic growth and adoption.

### Background

Astar Network (previously known as Plasm) is a dApp hub on Polkadot that supports Ethereum, WebAssembly, and layer 2 solutions like ZK Rollups. Astar aims to be a multi-chain smart contract platform that will support multiple blockchains and virtual machines. Polkadot Relay Chain doesn't support smart contracts. That's why it's important for the ecosystem to have a parachain that enables this for all developers who want to build in the Polkadot ecosystem. Astar is here to provide the best solution for all developers by supporting EVM and making a parachain where EVM and WASM smart contracts can co-exist and communicate with each other.

Primary utilities of ASTR token:

- dApp Staking
- Transactions
- On-chain Governance

Astar Network Statistics

![](https://ipfs.io/ipfs/QmZQT1LDxUYNpD9VRaacnQkEPSzRFGMu5oAGNgDVmsdTqo?filename=%E6%88%AA%E5%B1%8F2022-08-31%20%E4%B8%8B%E5%8D%883.03.11.png)

[Astar Network](https://twitter.com/astarnetwork?s=21&t=-1jwYR4gsK_ABoXt8Buw7A) now has 363.2K followers on twitter and 143k members in their [telegram group](https://t.me/phalanetwork). There are currently [448,505 unique on-chain holders of the ASTR token](https://astar.subscan.io/).

### Useful Links

- [Astar Network website](https://astar.network/)
- [Astar Documentation](https://docs.astar.network/docs/getting-started)
- [Astar DApp](https://portal.astar.network/#/assets)
- [ASTR Tokenomics](https://docs.astar.network/docs/about/token-economics/economics)

### Expected Benefit to Parallel Finance

We believe this integration of the ASTR token into Parallel Money Market will attract an enormous amount of attention from the Astar community and expand our general user base by offering them a chance to try out the core function of Parallel Finance.
This integration will also likely to boost the TVL of Parallel Finance by introducing a new asset into our money market, further solidifying our status as the leading DeFi protocol within the Polkadot ecosystem.

### Rational

As the leading Money Market on Polkadot Network, Parallel Finance will be able to offer the Astar community with the best borrowing/lending solution to their native token ASTR. It will be the first Money Market integration for Astar Network and we believe that Parallel can significantly improve the capital efficiency of the long-term ASTR token holders by allowing them to borrow DOT/KSM against their ASTR position without selling the underlying assets.

### Suggested Parameters

Collateral Factor - 20%

Liquidation Factor - 30%

Initial Supply Cap - 10,600,000 ASTR

### Risk and Mitigation

Risk 1 - Potential Liquidation

Mitigation: We will start with a low LTV for ASTR collaterals to ensure that the amount of borrowing allowed for ASTR token holders is restrained within a reasonable range, so that even with a short term price volatility, it will be unlikely for them to get liquidated.


**Problem Statement:**
- The Astar Network community needs a borrowing/lending solution for their native token ASTR.

**Significance:**
- Integrating ASTR into Parallel Money Market will attract attention from the Astar community and expand the user base of Parallel Finance.
- It will boost the Total Value Locked (TVL) of Parallel Finance and solidify its status as the leading DeFi protocol in the Polkadot ecosystem.

**Proposed Solution:**
- Add ASTR as a borrowable asset and collateral to Parallel Money Market.

**Expected Outcomes:**
- Increased exposure and adoption of Parallel Money Market from the Astar community.
- Improved capital efficiency for ASTR token holders by allowing them to borrow against their ASTR position without selling the underlying assets.

#791 Proposal | Support ASTR as both a borrowable asset and a collateral on Parallel Money Market