On-chain assets
Last updated
Last updated
Stabilizers can provide leverage for tokens or on-chain DeFi strategies.
The DeFi strategy is a vault or a custom-programmed strategy that implements the iAsset interface in a smart contract. The smart contract will invest, hold the resulting tokens or accounts as collateral, and divest.
The stabilizer partners with a single borrower that decides when to borrow and deploy the strategy.
Borrowers can build their own strategies, or apply to manage a strategy that the funding protocol has developed in house.
Borrowers can borrow and repay at any time. They should be motivated to borrow when they think they can make a spread over the cost of funding
The protocol and the Stabilizer have the right to ask for repayment at any time.
Funding protocols will use this right to force repayment when savers are reducing funding
Stabilizers will use this right to liquidate if losses bring the junior tranche equity below a the minimum requirement
Borrowers can remove reward tokens and other assets if they satisfy the required equity ratio, assuming the "other assets" are worth zero. This gives them a simple way take out assets that are difficult to trade in the automated strategy.
Maxos will provide code for an asset that invests in a specific token and can offer it for liquidation..
DeFi strategies can provide 24/7 liquidity (investment and divestment). They are useful for staying fully invested when money is coming in or going out. They can improve returns during times when risk-adjusted DeFi yields are better than off-chain yields. They provide a way to partner with borrowers that have customized strategies.
Stabilizers partner with a single wholesale borrower for each strategy. This simplifies the work of the DeFi DAO by getting focused design and attention from a dedicated partner. Stabilizers can support customized terms.
