The Stabilize Protocol is a decentralized finance application designed to help keep stablecoins and BTC proxy tokens prices stable by rewarding depositors with STBZ tokens and by using active strategies to balance coin demand. Users have the option to swap pools manually to achieve a higher rate of reward or deposit into the active strategies that swap tokens on their behalf.
We plan to make the active trading process more streamlined and profitable by introducing executor incentives. Currently, the active pools (zs-USD and zs-BTC) trade upon wrapping and unwrapping when certain parameters are met. This leads to consistent but unorganized trading that can miss great swap opportunities. We can make this process more profitable for depositors if trades occur at the best swap times where the profit margin is highest so we have devised a method that rewards people that execute trades on behalf of depositors at the right time. These people would be acting as executors.
What is an executor?
An executor is any person that triggers a trade, by calling the above function in the strategy, on behalf of the depositors in the pool. Anyone can be an executor. Executors earn a percentage of the trade profit, starting at 10%.
A successful executor is one that is profitable and knows when to trigger trades that will give him/her profit that is greater than the gas cost of triggering those trades. To do that, he/she must monitor the pool’s composition, price spread between tokens and Ethereum gas price to calculate profitability. The executor can also periodically query the helper view function on the strategy shown below to determine when to trade:
While on most yield earning protocols, there exists one strategist that must monitor and earn a percentage of the trading fees, we at Stabilize decided to make the process more open and reward anyone that has the ability to monitor the market a piece of profit from our strategy profits.
How to become an executor:
The easiest way to start is the develop an off-chain bot that monitors the strategy continuously. This bot would query the expectedProfit function which returns wei units (10¹⁸ wei = 1 USD / BTC), calculate its own expected profit (10% of the expected profit) then calculate the gas cost based on current gas prices. If the profit is greater than the gas costs, the bot would create a transaction to executeSwapTokens with its own address as the parameter to receive its percent of profit. The bot will also set a minimum seconds since the last trade to limit its gas cost in case someone else beats it to the trade.
In the end, the executor will make continuous profit, trading depositors funds at the right times and depositors will make the best compound interest possible as their funds are traded at the most profitable times. It is important to note that the contract itself doesn’t allow for trading at a loss. STBZ holders also benefit as some funds are siphoned to both the treasury and the staking pool too.
Join the community to learn more
Stabilize will begin to utilize executors in its upcoming strategies. Follow us on Twitter and join our Telegram to find out when they are released.