PLAAS (4/4): attracting liquidity with looping, yield-bearing stablecoins, and on-chain saving account!

This article is the fourth and last of a series of 4 articles related to our PLAAS program.

In the previous articles, we went over the various use cases that enables the PLAAS program. But to make them work, the pools need first to attract liquidity!

Yield through liquidity mining and trading fees play an essential role into attracting and retaining liquidity. In this article we will highlight how looping and yield-bearing stablecoins can attract respectively DeFi power users and less savvy users.

Yield-bearing stablecoins!

superFIAT are yield-bearing stablecoins! Technically, they are yield aggregator vault tokens!

For example, when a user deposits their Curve’s 4eur LP tokens into Beefy, the latter emits moo-4eur-lp tokens that represent the user’s position. Beefy reinvest the yield into the pool, making the moo-4eur token a token that represents a basket of Euro stablecoins earning yield, hence it is a yield-bearing stablecoin.

To make them more user and developer-friendly, we plan on wrapping these vault tokens into a token using the aToken rebasing model: users' balance will update automatically. We plan on launching superEuro, superYen, superNaira, etc. using this rebasing model.

superFiat token as building blocks: looping!

One way to retain liquidity providers once the yield is going down is to enable looping, which consists in using the superFiat (vault token) as collateral to borrow stablecoins. Since superFiat tokens are a basket of stablecoins, they are perfect for being used as collateral to borrow other stablecoins, considering their low volatility.

For example, superEuro and superYen are tokens representing the 4eur-lp and 2jpy-lp vault on a yield aggregator like Beefy. They will be able to be used as collateral on money markets like market.xyz to borrow QiDAO’s MAI. Users will be able to earn additional yield by reinvesting the borrowed MAI into QiDAO’s liquidity mining program, to sell MAI for more Euro or Yen stablecoins to increase their stake in our own liquidity mining program, or simply cashing them out using JPYC or jEUR…

Our plan moving forward is to work with many more money market and CDP-based stablecoins protocols to support superFiat as collateral.

On-chain saving account

DeFi power-users often act are mercenaries, and their loyalty lays down to how much yield you can provide them versus how much yield they can earn elsewhere. A more sustainable approach to attract and retain liquidity is to target less savvy users, who would leave their liquidity working for years.

Abstracting away all the complexity of participating in our liquidity mining program will be the keystone to secure liquidity! Working with centralized applications and or user-friendly non-custodial wallets to support our vault will be a very important milestone.

Combined with the fiat on and off-ramps network mentioned in the past articles, it can create on-chain saving account for multiple currencies, or a basket of currencies (an on-chain saving account for an SDR currency for example).

Financing the PLAAS!

Within the PLAAS, liquidity providers supplying liquidity to these pools are earning multiple rewards:

• in $JRT, Jarvis Network’s governance token (that will be rolled out to a utility token soon);
• in $UMA, since Synthereum v1 is using the UMA’s DVM as an oracle for liquidation, the UMA foundation distributed us a weekly grant for a few months, and as such our treasury has accumulated $UMA tokens;
• in the token of projects partnering with us ($ANGLE, $FOREX, $MIMO, etc.);
• hypothetically: in the token of the AMM, and in the token of the Blockchain the pools are.

Since fiat-backed stablecoins issuers do not have a token and therefore we are supporting entirely the cost of these programs. The plan in the future would be to request from these projects benefitting from the PLAAS, to participate in the incentives by purchasing JRT from the market and redistributing them to liquidity providers through the program.

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