The appeal of liquidity in the PLAAS program's circular and yield-stable coins
Introduce the importance of loop and yield stablecoins in attracting both advanced DeFi users and regular users, as well as their application and future plans in the PLAAS program.Author: Jarvis Network
Compiled by: ChainCatcher
This article is the fourth and final piece in a series of four related to our PLAAS program.
In previous articles, we introduced various use cases supporting the PLAAS program. However, to make them work, liquidity pools first need to attract liquidity!
The earnings generated from liquidity mining and trading fees play a crucial role in attracting and retaining liquidity. In this article, we will focus on how looping and yield-bearing stablecoins attract both DeFi power users and less savvy users, respectively.
superFIAT is a yield-bearing stablecoin! Technically, they are yield aggregator treasury tokens!
For example, when users deposit their Curve's 4eur LP tokens into Beefy, the latter issues moo-4eur-lp tokens representing the user's position. Beefy reinvests the earnings back into the pool, making the moo-4eur token a representation of a basket of euro stablecoins earning yield, thus it is a yield-bearing stablecoin.
To make them more user and developer-friendly, we plan to wrap these treasury tokens into a single token using an aToken rebase model: the user's balance will update automatically. We plan to launch superEuro, superYen, superNaira, etc., using this rebase model.
Once the yield decreases, one way to retain liquidity providers is to enable looping, which includes using superFiat (treasury tokens) as collateral to borrow stablecoins. Since superFiat tokens represent a basket of stablecoins, considering their low volatility, they are very suitable as collateral for borrowing other stablecoins.
For instance, superEuro and superYen are tokens representing the 4eur-lp and 2jpy-lp treasuries on yield aggregators like Beefy. They will be able to serve as collateral to borrow MAI from QiDAO on money markets like market.xyz. Users can earn additional yield by reinvesting the borrowed MAI into QiDAO's liquidity mining program, selling MAI for more euro or yen stablecoins to increase their stake in our own liquidity mining program, or simply cashing out using JPYC or jEUR…
Our future plans include collaborating with more money markets and CDP-based stablecoin protocols to support superFiat as collateral.
DeFi super users often play the role of mercenaries, with their loyalty depending on how much yield you can provide them and how much they can earn elsewhere. A more sustainable approach to attracting and retaining liquidity is to target less savvy users, who will let their liquidity work for years.
Abstracting all the complexities of participating in our liquidity mining program will be the cornerstone of ensuring liquidity! Using centralized applications and/or user-friendly non-custodial wallets to support our treasury will be a very important milestone.
Combined with the fiat on/off ramp networks mentioned in previous articles, on-chain savings accounts for multiple currencies can be created, or a basket of currencies (such as an on-chain savings account for SDR currencies).
In PLAAS, liquidity providers who provide liquidity to these pools receive various rewards:
Since fiat-backed stablecoin issuers do not have tokens, we fully support the costs of these programs. Future plans include requiring these projects benefiting from PLAAS to participate in incentives by purchasing JRT from the market and redistributing it to liquidity providers through the program.
