Ratio Finance introduces liquidations to maintain the system healthy for their customers and to grow into accepting LP tokens.

Introducing Liquidations

Yet, they have only accepted stable-stable pairs to minimize the risk of liquidation. Because USDr is an overcollateralized kind of debt, the TVL of Ratio Finance must always be much more than the amount of USDr in circulation.

Dynamic Risk Management

There is a Collateralization Ratio in place for each Collateralized Debt Position (CDP) available Ratio based on the risk rating of the liquidity pool as determined by the Ratio Risk Ratings (RRR). For example, the USDT-USDC liquidity pool on Saber has rated ‘AA’ according to the RRR, with a Collateralization Ratio of 110%.

This means that a user must deposit $110 in collateral to generate $100 in USDr.

Repay to be Safe

Because of the fluctuating macro-environment, the Collateral Value may fall below the Collateralization Ratio. As a result, a liquidation procedure will be begun to safeguard the protocol and its users from any potential negative consequences.

Ratio Finance encourages customers to use the Collateral Deposited to Debt to regularly check the health of their position.

They provide borrowers with two choices for repaying their debt:

A borrower purchases USDr on the open market and repays on the platform.

The borrower generates more LP tokens and deposits them immediately on the platform.
These strategies enable its consumers to raise their Collateral Debt ratio while avoiding Liquidation.

Partial Liquidation

As previously indicated, in a liquidation event, the Ratio Protocol will often not unwind and liquidate its users’ whole position; rather, only a portion of the collateral liquidates, and the borrower will return to a healthy position.

Furthermore, fees reflect the protocol’s haste to liquidate and unwind the LP position at some expense to account for trading fees and slippage. By making this little modification to the borrower’s position, Ratio’s Liquidation Engine recalibrates the borrower’s position, allowing for a risk-on setting.

Risk Epochs and Full Liquidation

Ratio’s Risk Engine monitors and updates each user’s vault regularly. These tests take place in epochs with durations set by the Ratio DAO.

The Risk Epochs are now 10 minutes long, which implies that debtors’ positions are examined and set for repayment, partial liquidation, or complete liquidation every 10 minutes.

They should be aware that Ratio’s Liquidation Engine, is intended to avoid full liquidations until required.

However, complete liquidations might occur during moments of extreme volatility.

Conclusion

Essentially, the addition of liquidations enhances the health and sustainability of the Ratio Protocol. Serves as a gauge for its users to make risk-averse decisions constantly. It also lets them take volatile pairings as collateral to mint USDr, which is critical. This implies that its customers will soon be able to take advantage of leveraged yield farming for a variety of volatile and non-stable pairings, including sSOL/SOL, RAY/USDC, and mSOL/SOL. They are ecstatic about this option since it opens up a new avenue for Solana customers to obtain access to leveraged return possibilities at risk appetites of their choice!

About Ratio Finance

Ratio Finance is a Collateralized Debt Position protocol on Solana. The platform allows users to leverage their LP and other assets by minting risk-adjusted “USDr” against their collateral. Ratio Finance uniquely calculates the volatility of collateral to keep users’ assets safe.

Website | Twitter 

SOURCE

Medium

REQUEST AN ARTICLE

The post Ratio Finance Introduces Liquidations appeared first on Smart Liquidity Research.

Kamino Finance launches UXD stablecoin strategy vault. With the UXD vault included, Kamino will now be an automated concentrated liquidity solution or liquid assets. Supporting all significant Solana-native DeFi stablecoins, such as USDH, USDr, and USH.

Plans by Kamino

All coins offered on Solana will have automatic concentrated liquidity management provided by Kamino. As obtaining deep liquidity is one of the most crucial components of preserving the health of dollar-pegged stable asset/stablecoins assets on decentralized exchanges, this service will become especially crucial for the ecosystem’s stablecoins (DEXs).

The fiat-backed stablecoin USDC will be linked with the token in the UXD vault because of its stability and liquidity when combined with other stablecoins in Decentralized Finance (DeFi) applications. Users that deposit either UXD or USDC into the UXD vault. Can benefit from Kamino’s automated rebalancing and auto-compounding, which maximizes actual profit from trading fees.

About UXD and Recent Protocol Innovations

With almost $15 million in circulation, UXD is one of the biggest circulating Solana-native stablecoins. To optimize capital efficiency, the project has placed a high priority on developing innovative stablecoin designs. To that end, UXD introduces the first stablecoin on the market, supported by delta neutral positions on Mango Markets.

The Asset Liability Management Module has emerged as the project’s new direction. For preserving UXD’s backing and scalability, this new architecture adds lending, overcollateralized loans, real-world assets (RWAs), and other techniques on top of delta-neutral positions.

Additionally, UXD intends to turn its governance token, UXP, into a cash-flow token that generates income from these different other businesses. UXD will be made accessible on Optimism, the Ethereum Layer 2 solution, along with these updates, transforming the platform into a cross-chain stablecoin provider.

UXD reduced its maximum issuance ceiling from an all-time high (ATH) of $40 million to its current level of $15 million as a result of the market slowing down and declining open interest on Mango. As UXD tries to reclaim its prior ATH and beyond through a variety of tactics across several networks, Kamino intends to assist UXD in developing steady and deep liquidity.

Kamino is Spearheading Stablecoin Growth on Solana

For generating deep liquidity for tokens on Solana’s focused liquidity DEXs, Kamino is a potent tool. Stablecoins may further stabilize their pegs with deep liquidity by utilizing Kamino’s capabilities. And they can also lessen any price effect on their tokens during trade, particularly during times of turbulence.

Kamino contributes to the improvement of the Solana stablecoin environment by introducing a new stablecoin to its automated vault solutions. Additionally, with the opening of the UXD vault, Multicoin Capital and Kamino will work together to promote the development of two types of stablecoin projects—Hubble Protocol and UXD—in order to strengthen the DeFi ecosystem on the network.

Nine automated vaults have gone online with over $5M in TVL placed by Solana’s DeFi customers since Hubble Protocol assisted in the incubation of the debut of Kamino Finance. Kamino intends to keep constructing more vaults to support Solana initiatives and native programs and create deep liquidity options for everyone.

About Kamino

Kamino automatically manages your concentrated liquidity positions. When depositing your tokens, Kamino opens a liquidity pool position on a DEX and does everything for you. Rebalancing, auto-compounding, and finding the optimum range for capturing the most trading fees while avoiding impermanent loss (IL).

Website | Twitter

About UXD Protocol

Algorithmic stablecoin backed 100% by a delta neutral position using derivatives.

Website | Twitter

SOURCE

https://blog.kamino.finance/kamino-launches-uxd-vault/?utm_source=twitter&utm_medium=social&utm_campaign=blog_internal

REQUEST AN ARTICLE

The post Kamino Finance Launches UXD Stablecoin Strategy Vault appeared first on Smart Liquidity Research.

Partnership Highlights

In this strategic partnership of Swim with Ratio, they will be rolling out various initiatives aimed at increasing the utility of their stablecoin LP!

Thus, includes onboarding $swimUSD as one of the first multichain stable assets to EVER be accepted on a CDP platform, thereby allowing $swimUSD holders the opportunity to mint $USDr!

Introduction to Swim

Swim is a multi-chain AMM for native assets, designed to make bridging as easy as possible. Furthermore, they eliminate the need for wrapped assets. By allowing users to swap from a native asset on one chain to a native asset on any other supported chain.

Hence, Swim’s solution reduces the barriers faced by users when performing cross-chain transactions, enabling true interoperability between various blockchain networks.

Learn About Ratio Finance

Ratio Finance is a Collateralized Debt Position platform that allows investors to extend the capabilities of their liquidity provisioning efforts by locking their assets into safe & secure vaults, minting $USDr!

Indeed, Ratio’s Risk Rating Algorithms help you get maximum leverage against your deposited collateral. Without sacrificing the yield of your deposited LP!

STEPS

Therefore, you can learn more about $USDr and its extensive utility here:

https://medium.com/ratio-finance/introducing-usdr-7f9bbc3a5be

About Ratio Finance

Ratio Finance seeks to empower its users by allowing them to earn yield. Take out collateralized loans, and unlock the full potential of their capital all while providing a clean and easily accessible, and understandable interface. Since it is their goal to create an ecosystem on Solana. That favors users from every end of the spectrum all while driving liquidity and growth to the ecosystem as a whole.

Website | Twitter

About Swim Protocol

Swim, the Seamless Multi-Chain Liquidity Protocol! It provides a simple way to transfer tokens across chains via multi-token liquidity pools and Solana’s Wormhole. In short, no more delays, centralized bridges, or wrapped assets.

Website | Twitter

SOURCE

We're thrilled to announce our strategic partnership with @RatioFinance 🔥

In collaboration with Ratio, we'll be rolling out various initiatives aimed at increasing the utility of our stablecoin LP 💪 https://t.co/rylUaN2KLa

— Swim Protocol (@SwimProtocol) June 21, 2022

The post Swim Strategic Partnership With Ratio appeared first on Smart Liquidity Research.