The concept of Stablecoins (How do you match you dollar to a Metaverse?)
Traditional: 1:1 (USDT, USDC, TUSD)
Synthetic (other assets of values are matched to issue 1$)
there are other assets behind your secured dollar
eth was first used as collateral
Collaterization Ratio: For how much of an asset you need to deposit to get the stablecoin out?)+ the price of these assets fluctuates
Yield productivity assets:
you put your money down as collateral that allows you to take out a loan
what you put down as collateral itself generates income (the loan re-pays itself)
OIN uses STNear as collateral
Risks: if the market is crashing down and people are getting liquidated, the stability pool is going to be catching nicely - all coins that have to be sold will be bought by the stability pool
OIN stability pool:
stablecoin value increased
but in rewards, STNear decreased (as it got liquidated
USDo in the stability pool will be used to pay off the debt (дит) of the account that has fallen below MCR and STNear that the person has deposited as collateral, they loose STNear (no debt anymore but no collateral either, STNear gets distributed to the stability pool contributors)
Rewards section: your STNear comes from people that got liquidated
Stability pool is there to guarantee that all thr positions that fall below C-ratio get liquidated
But anyone can come to “liquidation” if a position falls below 160, they can liquidate ( opp to buy coins as 10% discount)
Later, exchange USDo for other assets (that are also liquid) → that is why heavy yield returns
is a company that has physical possession of your financial assets. It’s often a brokerage, commercial bank, or other type of institution that holds your money and investments for convenience and security.→ OIN NON-custodial
While Binance is custodial
A collateral is an asset a user must lock up to borrow the required amount of stablecoin.
Cheddar aims to create dApp interconnectivity and a fun way to stay engaged in the NEAR ecosystem.
Some Simple Economics of Stablecoins
2 levers to protect stability:
the choice of reserved assets
the design of the stabilization mechanism used to keep the coin price pegged to the reference asset
when demand rises, the stabilization mechanism increases supply of coins. When it decreses, it burns some coins reducing supply through the sale of reserved assets
3 approaches to do these procedures:
stablecoins backed by fiat that rely on financial intermediaries (USDT)
stablecoins backed by cryptocurrencies automate reserve operations (DAI)
stablecoins backed by their own investment token rely only on their algorithms (algorithmic stablecoins)
DeFi protocols rely on 2 features:
First, they depend on users locking value in order to use that liquidity to power some type of service
Second, DeFi protocols typically have a mechanism for rewarding providers of liquidity, often in the form of the protocol’s governance token
DeFi protocols can be grouped into 4 major categories:
First, decentralized exchanges (e.g. Uniswap, Sushiswap, Curve Finance, Balancer) let users exchange cryptocurrencies without relying on an intermediary. Rely on liquidity pools
Second, collateralized lending platforms let users deposit one token in exchange for interest, and borrow another token using the original one as collateral.
Third, DeFi asset management platforms (e.g. yearn.finance) let users optimize portfolios by automating holdings to maximize returns across different DeFi protocols.
Last, decentralized derivatives applications deliver functionality such as insurance, futures, or options contracts, relying on price movements that are external to the protocol and brought in through oracles.