Collateralized Debt Position (CDP) Module

The Carbon Money Market

Introduction

The Collaterized Debt Position, or "CDP" module enables users to earn yield on their assets in Carbon, as well as take out loans on their deposited assets. This is also known as a money market.

The CDP module also allows for the minting of a USD-pegged stablecoin, known as USC.

Rationale

Money markets are crucial for the proper pricing of tokens, as well as for orderly flow of capital between market participants in the DeFI economy. Stablecoins also continue to play a core pillar in DeFi, and for a long time, centralized stablecoins were a good choice.

But with the recent and sudden censorship activities from centralized stablecoins, we believe that the need for decentralized stablecoins has begun stirring once again.

We believe that a decentralized economy requires a decentralized stablecoin, but we have learned from the fall of Terra's $UST and will be using a safe, proven, and sustainable model.

With an increasingly multi-chain world, there will be an increased the demand for permissionless lending and borrowing of assets. Thus, having a money market on Carbon synergizes well with our multi-chain, mult-token model, and will open up strategies and opportunities for users of the protocol.

How it Works

The next section goes into details on the various operations that can be done via the CDP module.

For frequently asked questions, check out our FAQ page!