The Stabilize Protocol is a decentralized finance application designed to help keep stablecoins prices stable by using active strategies that arbitrage over multiple exchanges and by providing liquidity to protocols that support stability. Users earn from price fluctuations between tokens, whether the market is in bull or in bear. The protocol can be utilized on both Arbitrum, a layer 2 solution for Ethereum and Binance smart chain networks.
During the migration to Arbitrum, a new tokenomics for Stabilize ETH was discussed with a focus on sustainability. The goal was to incentivize liquidity for active strategies without the need for constant minting of new tokens. After considering multiple options, we designed a model that buys STBZ from the market with profit made from the strategies to use it for future emissions. With this design, STBZ would have a capped / decreasing circulating supply while at the same time, encourage new users to start using the protocol.
We can say at this time, as Stabilize for Arbitrum switches to ~1% yearly inflation, it has enough STBZ in the bank to have a net zero increase in the total amount of tokens for the next several weeks. This means weekly emissions without weekly minting.
As new strategies are developed on Arbitrum that further increase profit for the protocol, this may translate from just a net zero increase in total supply to a decrease in circulating supply.
Stabilize for Arbitrum is one of the few protocols that takes current profit to store away for future use. This is integral for its plan for sustainability in the long run and allows it to move away from the “farm and dump to death” model.
Join our community to learn more about Stabilize
Visit the website to get started using the Stabilize protocol, follow us on Twitter and join the community on Telegram.