The Stabilize Protocol will integrate Aave lending pools to further provide benefit to stablecoin depositors on Stabilize. Depositors will earn interest from their deposits via Aave lending pools while simultaneously earning STBZ rewards for participating in our stablecoin pools.
There will also be a small withdrawal fee that decreases the longer users stay in the pool. The entire fee will go to a brand new Stabilize Protocol treasury contract whose funds can be redeemed by STBZ holders.
How it works:
The Stabilize website will add a new section to the site where users can deposit tokens directly into the Aave lending pool and receive wrapped tokens back representing their deposit. They can then deposit these wrapped tokens into one of Stabilize’s pools to start earning STBZ rewards.
When they are ready to redeem their underlying asset, users can withdraw their wrapped tokens from the pool, unwrap them through the website and receive the underlying asset plus interest minus the withdrawal fee.
The eventual plan is to convert all the stablecoin pools into interest earning equivalents. The first pool to transition will be the USDC pool. This transition will take sometime and we will notify the community via Twitter before making any changes. As we cannot touch any funds, users will need to withdraw and re-deposit to switch pools they are in when the time comes.
How does the treasury work:
As mentioned previously, all withdrawal fees go directly into the treasury contract. STBZ holders can redeem these funds with their STBZ tokens. They will simply burn their tokens into the treasury to receive a proportional amount of treasury funds compared to the circulating supply. Circulating supply is defined as all STBZ tokens outside the Stabilize Protocol operator contract.
For example, if I have 500 STBZ tokens and the circulating supply is 10,000, I have 5% of the circulating supply. If the treasury contains 100,000 USDC, I will be able to redeem 5,000 USDC by burning my 500 tokens. This will make STBZ an asset-backed token whose value is beyond its speculative price.
How much are the withdrawal fees?
This is where the value of governance comes in. The cost of the withdrawal fees are yet to be determined but the development team will make a proposal via its Snapshot page to gain input from the community as to what the fees should be. When the proposal is live, community members can then vote with their STBZ tokens to make a real impact on important decisions in the protocol.
Visit the website to get started using the Stabilize protocol, follow us on Twitter and join the community on Telegram