Backed entirely by PLS, USDL will be the most decentralized stablecoin we have.
Its peg is robust, and the stability pool is one of the best kept secrets in DeFi.
Here’s how it keeps the $1 peg, and how the @liquidloansio stability pool can help you accumulate cheap PLS:
Its peg is robust, and the stability pool is one of the best kept secrets in DeFi.
Here’s how it keeps the $1 peg, and how the @liquidloansio stability pool can help you accumulate cheap PLS:
2/13
Liquid Loans is a decentralized borrowing protocol where you can lock up PLS and borrow against it.
Much like MakerDAO’s DAI, borrowing takes the form of minting a stablecoin against the collateral – in this case, USDL.
Liquid Loans is a decentralized borrowing protocol where you can lock up PLS and borrow against it.
Much like MakerDAO’s DAI, borrowing takes the form of minting a stablecoin against the collateral – in this case, USDL.
3/13
Unlike its competitors, however, Liquid Loans *only* accepts PLS as collateral.
This means that its stablecoin is backed entirely by decentralized collateral.
No USDC or USDT, and no centralization risk.
Unlike its competitors, however, Liquid Loans *only* accepts PLS as collateral.
This means that its stablecoin is backed entirely by decentralized collateral.
No USDC or USDT, and no centralization risk.
4/13
USDL maintains its peg through a few different mechanisms.
One of them is its floating fee structure for borrowing and redemptions.
USDL maintains its peg through a few different mechanisms.
One of them is its floating fee structure for borrowing and redemptions.
5/13
Like any stablecoin, maintaining a peg is a matter of controlling its supply.
Since USDL can only be created by minting against PLS, its supply is a function of how many users are currently borrowing in the system.
Like any stablecoin, maintaining a peg is a matter of controlling its supply.
Since USDL can only be created by minting against PLS, its supply is a function of how many users are currently borrowing in the system.
6/13
Through floating fees, Liquid Loans incentivizes users to borrow or redeem their USDL at different times.
Also, if USDL is below peg, the protocol has an arbitrage opportunity by allowing users to redeem 1 USDL to $1 of PLS reducing supply and driving price up.
Through floating fees, Liquid Loans incentivizes users to borrow or redeem their USDL at different times.
Also, if USDL is below peg, the protocol has an arbitrage opportunity by allowing users to redeem 1 USDL to $1 of PLS reducing supply and driving price up.
7/13
While USDL has as many use cases as any stablecoin, Liquid Loan's own stability pool is perhaps the most attractive.
The stability pool is a USDL liquidity pool that liquidates vaults that fall below a 110% collateral ratio.
While USDL has as many use cases as any stablecoin, Liquid Loan's own stability pool is perhaps the most attractive.
The stability pool is a USDL liquidity pool that liquidates vaults that fall below a 110% collateral ratio.
8/13
Users can lock their USDL in the pool for ~8% $LOAN token emissions.
More importantly, though, this USDL is used to purchase the PLS collateral of anyone who gets liquidated.
Users can lock their USDL in the pool for ~8% $LOAN token emissions.
More importantly, though, this USDL is used to purchase the PLS collateral of anyone who gets liquidated.
9/13
For one thing, this typically occurs during dips in the PLS price. It's worth noting however that massive movements don't typically happen in brief time periods. Often large 15% or more dips take days , weeks, or months.
For one thing, this typically occurs during dips in the PLS price. It's worth noting however that massive movements don't typically happen in brief time periods. Often large 15% or more dips take days , weeks, or months.
10/13
This means that anytime your USDL is actually used to purchase liquidated collateral, it’s a safe bet that you’ll be buying PLS at a steep discount – like DCA’ing into capitulation.
This means that anytime your USDL is actually used to purchase liquidated collateral, it’s a safe bet that you’ll be buying PLS at a steep discount – like DCA’ing into capitulation.
11/13
For another, because Liquid Loans vaults are only liquidated at 110%, purchases made by the stability pool garner $1.10 worth of PLS for every 1 USDL spent.
Not only are you buying PLS at liquidation prices, you’re getting an additional 10% discount from there.
For another, because Liquid Loans vaults are only liquidated at 110%, purchases made by the stability pool garner $1.10 worth of PLS for every 1 USDL spent.
Not only are you buying PLS at liquidation prices, you’re getting an additional 10% discount from there.
12/13
These attributes make USDL a competitive option for storing sidelined capital.
High LP rewards, effortlessly purchasing discount PLS, and without the censorship concerns that accompany centralized alternatives.
These attributes make USDL a competitive option for storing sidelined capital.
High LP rewards, effortlessly purchasing discount PLS, and without the censorship concerns that accompany centralized alternatives.
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