Developers of yEarn Finance announced the launch of the StableCredit lending protocol, which uses stablecoins and an automated market maker mechanism.
Introducing StableCredit, a new protocol for decentralized lending, stablecoins, and AMMs. https://t.co/Cuoo2OMi5H
— yearn.finance (@iearnfinance) September 10, 2020
“StableCredit is a protocol that includes tokenised debt stablecoins, lending, and one-sided automated market making to create a fully decentralised lending protocol,” wrote a representative of yEarn Finance, Andre Cronje.
As explained by the developer, users deposit USD-pegged USDC. Its market value is roughly $1, but can deviate from the target value at times. An oracle reports the exact price of USDC and mints the StableCredit USD stablecoin in accordance with the current rate.
Equal parts of USDC and StableCredit USD are used in the automated market maker (AMM) mechanism, which aims to keep the total value of assets at a single level.
Ultimately, users receive a certain amount of StableCredit USD, the tokenised version of the US dollar. They can use these funds as collateral to borrow other assets within the AMM framework.
According to researcher Hasu, StableCredit differs from many other lending DeFi protocols in lacking a governance token.
“A lending protocol without a governance token is an innovation. There is no need for voting tokens or extracting revenue at the expense of users,” Hasu emphasised.
According to Cronje, the application’s user interface will be ready by the end of September.
Earlier, the price of the yEarn Finance token (YFI) jumped to $35 000 amid news of its listing on Coinbase Pro.
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