Introducing Interest Bearing DefiDollar — A simple savings account
Unleashing the potential of open finance to bring a powerful building block to DeFi
We are excited to announce the Interest bearing DUSD (ibDUSD). Powered by yield-generating underlying protocol integrations (peaks), The ibDUSD presents a powerful savings account built on top of the core DefiDollar protocol.
This savings account functions in the following manner:
1) User Deposits DUSD to the ibDUSD contract — Visit https://app.dusd.finance/savings
2) User gets ibDUSD in return — an interest bearing token that gets stronger as protocol accrues income.
There is a 0.5% redemption fee that is used to guard against malicious actors trying to frontrun the rewards by deploying capital to the ibDUSD just before rewards are claimed periodically. It is similar to the exit load currently being implemented in yVaults.
Instead it is a good idea to transfer ibDUSD tokens directly without incurring the withdrawal fee.
The protocol rewards that accumulate on the DUSD LP capital are:
- Trading fees generated on the Curve pools
- The yield from the yUSD Peak
- DUSD redeem fee — 0.1%
- The ibDUSD redemption fee — 0.5%
Please note that the protocol income being generated from ALL DUSD in existence will be accruing to the IDUSD that is staked. For e.g if 10 Million DUSD exist and only 2 Million DUSD are staked in the ibDUSD contract, these 2 Million worth DUSD will be eligible to claim the protocol income accruing from the complete 10 Million DUSD.
Benefits for Community and Developers
- Ensure capital that is not locked for operational expenses to be leveraged to earn income in a risk free manner.
- Developers can integrate the ibDUSD as it is open and permissionless in nature to create powerful paradigms like Pool Together that need a mechanism to derive yield
- This is a result of the composability of the DeFi ecosystem and is possible that ibDUSD can be leveraged by developers to be baked into their applications and/or explore new use cases.
Future explorations
In the future the community may decide to allocate a part of this yield for DFD token buybacks and subsequent burns or makes, incentivizing liquidity in the stability module and/or votelocking etc.
Conclusion
The ibDUSD provides a simple open finance primitive to earn risk free interest on your stable assets. The yield depends on the total DUSD in existence (yield generating capital) and also on the staked DUSD (which has claims to the generated yield).
