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STBL Stability System
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STBL
Algofi's decentralized stable coin, a multi-asset collateral backed stable known as STBL.
​STBL (ASA ID 465865291) is a decentralized, over-collateralized stablecoin that is soft-pegged to the US dollar.
1 Trillion STBL were minted and irretrievably deposited into the Algofi protocol. This is the max supply of STBL that can be brought into open circulation.
How does STBL work?
Users are able to borrow STBL just like any other asset on the Algofi protocol. The entire minted supply of STBL has been permanently buried into the Algofi protocol, therefore any AlgoStable leaving the protocol are fully collateralized.
A simple example can help us to better understand this concept:
Alice deposits $200 Algorand (ALGO) into the Algofi protocol.
Alice now has a max borrow of $100 and she chooses to borrow $50 of STBL.
Provided the market value of her Algorand stays above $100 she is able to maintain her position without issue. If Alice fails to maintain her collateral, then a liquidator can repay her borrowed STBL in exchange for her deposited ALGO + liquidation incentive.
In order for the liquidator to have obtained their STBL they will have had to buy it on the secondary market or have borrowed it through the protocol. In this way the circulating supply of STBL is always fully collateralized, just like every other loan issued through the Algofi protocol.
What determines the borrow rate?
STBL borrowers are responsible for paying interest, just like any other loan issued through the Algofi protocol. At the launch of Algofi DAO, the borrow rate will be set by governance votes. All interest paid is accrued to the protocol reserves. Before the rate will be adjusted to maintain the STBL peg.
How do you ensure sufficient circulating supply for borrowers to repay their loans?
The interest accrued to the protocol is circulated back to community. If this were not the case, then the circulating supply of STBL would be less than the amount borrowed, which make it difficult for borrowers to repay.
What will Algofi do with the borrow reserves?
Algofi distributes STBL reserves to ensure liquidity and promote its growth and stability. STBL reserves will be circulated through:
- STBL / X LP Farming Contracts
- STBL Treasury (e.g. governance token buybacks)
How do I participate in the Algofi STBL staking pool?
Users participate by acquiring STBL then supplying to the Algofi STBL staking pool.
Users can get STBL by:
How do I participate in the Algofi farming pools?
Do I still earn trading fees when farming LP tokens?
Yes, in addition to the STBL staking rewards, users still earn the trading fees from the Algofi and Tinyman pools. This is because the LP tokens on Algofi and Tinyman are redeemable for trading fees + the initial pooled capital (less any impermanent loss).
Video: how to stake STBL
How to farm STBL LP tokens
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Contents
How does STBL work?
What determines the borrow rate?
How do you ensure sufficient circulating supply for borrowers to repay their loans?
What will Algofi do with the borrow reserves?
How do I participate in the Algofi STBL staking pool?
How do I participate in the Algofi farming pools?
Do I still earn trading fees when farming LP tokens?
Video: how to stake STBL
How to farm STBL LP tokens