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Exploring the various applications and benefits of the $USC Stablecoin
USC can be earned in two ways:
- Providing liquidity to liquidity pools on Demex. Becoming a liquidity provider earns rewards in a myriad of tokens being traded and borrowed, which includes USC. Specifically, the USC/USDC is amplified by 200x, enabling users to swap USC with USDC without incurring much slippage. This sets USC apart as an uncensorable, decentralized and secure Cosmos-native stablecoin with deep liquidity.
The creation of individual strategy vaults (eg. USC Vault) on Demex will enable users to earn a yield on value-accruing assets (e.g. Liquid staked assets) through one-click swaps by simply depositing USC: Deposit USC --> Enjoy rewards.
The following explains how the USC Vault works behind-the-scenes:
-> Borrow ATOM -> Swap into liquid staked ATOM ->Enjoy rewards
Liquid staked ATOM (lsATOM), the value-accruing, liquid-staking version of ATOM, is used for this example. We assume that lsATOM earns a 20% auto-compounding APR from liquid staking rewards.
- 1.Deposit 10,000 USC into the USC delta-neutral strategy Vault. Based on the deposited amount, the amount available for borrowing, estimated APR for earning, estimated health factor and slippage is calculated.
- 3.Next, the ATOM borrowed is swapped/staked into 7,000 lsATOM. This is similar to longing 7,000 lsATOM, which earns an annual 20% against ATOM.
- 4.Looping occurs. The Vault then deposits 7,000 lsATOM and borrows 3,500 ATOM at the maximum LTV of 50% - rinse and repeat - acquiring more lsATOM in the process.
- 5.The number of times this looping process occurs is determined by the looping parameter set by users.
- 6.To exit the Vault, the process is reversed i.e. the lsATOM will be swapped into ATOM and used to return the ATOM loan, until all ATOM borrowing is paid off. This leaves lsATOM as profits, which earns staking rewards.
The USC Vault streamlines the process, bypassing the in-between steps, such that users need only deposit USC to enjoy staking rewards from lsATOM.
Carbon’s upcoming (1) multi-asset collateral and (2) cross-margin feature will allow for multiple accepted assets to be used as collateral for trading, and take all accepted collateral in an account balance as margin. This means USC will be available as collateral for trading, to be lent out to others who need it for margin.
High Efficiency Mode (”eMode”) allows borrowers to extract the highest borrowing power out of their own collateral, resulting in increased capital efficiency when the price of the collateral and borrowed assets are correlated.
This feature is expected to be highly sought after for borrowing stablecoins and LSDs.
For example, it allows for the
- Deposit of Liquid Staked Derivatives (LSDs) such as rATOM, stATOM, or stkATOM - and borrowing of the native token, such as ATOM, at near 100% LTV. Users can choose to stake ATOM again to leverage loop.