Thread by @ThyBorg_

Yesterday @DeanTribble & @zmanian introduced $IST at the @Gateway_Conf in Prague. Difficult to imagine a better timing to present an over-collateralised IBC-native stable 🌕 here's my summary of the mechanics of the Inter protocol 🧵

@DeanTribble @zmanian @Gateway_Conf $IST is the latest Cosmos stable to position itself in the starting blocks for the $UST replacement race & you can check out the others here (the list is missing $SILK on @SecretNetwork & $USDX on the @kava_platform & I'll cover both separately)

https://twitter.com/ThyBorg_/status/1525148354321141760

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform Inter is a protocol on @agoric, a highly-anticipated IBC-enabled chain built on top of Tendermint. Agoric clearly deserves its own thread but the core value proposition is to let developers write smart-contract in JavaScript, the most dominant scripting language of the internet

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric $IST is the stable coin minted by the Inter protocol, and it stands for "Inter Stable Token" per @DougieDeLuca & @vanessadice

https://twitter.com/DougieDeLuca/status/1526187069147586560

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice Inter aims to be the @MakerDAO of the Cosmos ecosystem: users are able to deposit a collateral into a vault to mint a stable indexed to the US dollar. It's made of the following contracts (we'll focus on the user flow & differences w/ Maker rather than going through them here)

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO So let's imagine that $ATOM is now 40$ and that you have 10 coins. We'll also suppose that the collateral factor of $ATOM on Inter is 50% (that'll be decided through governance later)

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO - Deposit 100 $ATOM to Agoric via IBC
- Lock them into a vault (value: 10 * 40 = $400)
- Mint 50% * 400 = 200 $IST

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO Inter will have its own AMM so you'll be able to swap your $IST to $ATOM for leveraged exposure, or any other IBC coin for other purposes e.g $STARS to purchase #Stargaze NFTs, $OSMO to provide liquidity on #Osmosis, $REGEN to purchase carbon credits etc.

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO The AMM integration will make the Inter protocol more capital efficient than Maker: during liquidation events, the collateral will be sold quickly & efficiently, meaning the collateral factor can be set higher (e.g 80% instead of 50% in our above example)

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO The existence of a Reserve is another reason for higher collateral factors (and therefore higher capital efficiency): if the liquidation doesn't occur fast enough, it provides an emergency fund that can cover the protocol's debt

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO In addition, since the Vaults are specific to a user & a collateral type, the IST protocol only sells the precise amount of collateral needed in order to cover the outstanding debt (plus a liquidation penalty). Any remaining balance is returned to the vault

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO Inter comes w/ a "parity stability" module where users can provide a stable like USDC & receive IST directly (vs minting through a vault) for a lower cost

There are a couple of other interesting modules but they seem to be planned for later, so we'll revisit Inter at that point

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO The protocol generates profits by charging users a minting fee and an interest rate that is settled when the vault is closed

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO It'll be especially interesting to compare Inter with #Comdex or #Kava (which I'm still personally using quite a bit) after the protocol launches

https://twitter.com/ThyBorg_/status/1515507278895529986

@DeanTribble @zmanian @Gateway_Conf @SecretNetwork @kava_platform @agoric @DougieDeLuca @vanessadice @MakerDAO I will be doing just that, as well as covering the rest of the #Cosmos ecosystem through educative & digestible threads on governance, airdrops, tokens, teams & projects, so you may consider re-tweeting this & giving me a follow @ThyBorg_ ✌️