Defi on Aurora: A Deep Dive Into Rose
Rose, the first project incubated under Near Pad, is a liquidity protocol on Aurora that enables users to seamlessly exchange between assets as well as allow protocols to build on top of Rose to get liquidity assets. In this article, we will provide a thorough and accessible introduction to Rose touching upon its core features and ways to utilize them.
Rose: The Liquidity Layer on Aurora
Liquidity pools are a fundamental component behind any thriving DeFi ecosystem. Liquidity pools provide the basis for AMMs (automated market makers), yield farming or liquidity mining, borrow-lend protocols, and much more.
Rose, the newest liquidity protocol on Aurora, is going to play a key role in boosting Aurora’s DeFi ecosystem, attracting liquidity with low slippage and minimal trading fees.
By implementing a wrapped assets exchange and a Collateralized Debt Position (CDP) based stablecoin utilizing interest-bearing tokens as collateral, Rose will help facilitate trades, create yield generating protocols, and attract builders eager to access deep liquidity.
Rose Protocol’s Features
Stableswap: Stablecoin & wrapped assets exchange
Stableswap is the first AMM DEX on Aurora for trading stablecoins and wrapped assets against each other with low slippage and extremely cheap trading fees. On the demand side, a Stableswap offers a Uniswap-like automated exchange with low slippage and on the supply side it offers a multi-stablecoin “saving account”. This set-up creates a “Uniswap with leverage”, a mechanism for cross-markets for stablecoins with low price slippage and efficient saving account:
“StableSwap provides a mechanism to create cross-markets for stablecoins in a way which could be called “Uniswap with leverage”. It is a fully autonomous market-maker for stablecoins with very minimal price slippage, as well as an efficient “fiat savings account” for liquidity providers on the other side.”- Michael Egorov
The Stableswap creates a safer environment for users to swap similar assets without getting exposed to the high slippage common on regular DEXs, allowing users to earn yields more efficiently. This innovative feature is going to attract large numbers of stablecoins and wrapped assets like wETH, wBCT, ect..as users will be incentivized to bridge their assets to the ecosystem and become liquidity providers to earn yield from a long term liquidity mining program.
This stream of liquidity will greatly benefit the ecosystem as it will enable new projects to build new use cases that utilize these assets. It will also allow users sitting on idle stables and wrapped assets to passively earn their yield, thus creating a strong incentive for all parties involved.
Rose Dollar: CDP stablecoin utilizing interest-bearing tokens as collateral
The Rose Dollar (RUSD) is a USD pegged stablecoin that users can mint by depositing their interest-bearing tokens (ibTKN). Following the principles of Abracadabra Money, RUSD will be minted by multi-signature holders and go out of circulation after being collateralized on the platform.
The process is straightforward. Users deposit ibTKNs as collateral and get assigned a debt allocation with interest. RUSD then gets deposited to the borrower, who will be able to freely use its borrowed RUSD across protocols on the Aurora ecosystem. The main advantage of using a ibTKNs as collateral is that it can increase its value over time, while the user can still use his RUSD to stake it, buy in the secondary market or earn as rewards from different incentive programs and receive stROSE (an interest-bearing governance token that can be used as collateral to get more RUSD).
How to Get Started on Rose
Getting started on Rose is very simple, here we provide a visual guide to make your experience even easier!
1. Connecting your wallet
Go to https://app.rose.fi/#/ and connect your MetaMask Wallet on the right-hand corner.
On Rose, the following stablecoins can be swapped: DAI, FRAX, USDC, USDT, atUSD, abBUSD. You select the stablecoin you hold and the stablecoin you want to obtain and hit Swap. Before the swap goes through you will be shown an overview of the maximum slippage and the gas required for the operation. Since gas fees are paid in ETH, you need to make sure you always have a sufficient amount to sign the transaction.
3. Providing Liquidity
To provide liquidity on Rose you enter into the ‘Pools’ section and select your preferred pool. Once you confirm the action you will see on the top right corner the percentage of share you are contributing to. You can withdraw liquidity easily , whenever you want, by simply hitting on ‘Withdraw deposit’. However, you will need to provide liquidity in order to be able to farm.
Also, when you deposit your stablecoins the amount will be divided into a mixed basket of stablecoins — RoseStablesLP.
To start farming on Rose you first need to choose a pair of tokens. In my case, FRAX/ROSE. You select the desired amount you want to deposit and you hit deposit.
Once the transaction is approved, your rewards will be shown on the top right corner, next to the present icon.
There are different ways in which you can obtain Rose tokens: farming and buying them. The easiest way to buy $ROSE is on NEAR Pad but it is also available on CoinGeko and DEX Screener.
Once you have obtained your $ROSE you can go to ‘Stake’, select the amount you want to stake, and confirm the transaction.
After the transaction is approved you will be able to see the amount of stROSE you own as well as the minimum time it will be locked.
Currently, the Rose team is working on the deployment of a new functionality that will allow users to borrow stablecoins. To stay up to date with the latest news follow Rose on Twitter, and join their Discord group.
Aurora is an Ethereum Virtual Machine created by the team at the NEAR Protocol, delivering a turn-key solution for developers to operate their apps on an Ethereum-compatible, high-throughput, scalable and future-safe platform, with low transaction costs for their users.
About NEAR Protocol
NEAR is eliminating the barriers to Web 3 adoption. With high speeds, low fees, and progressive UX, NEAR’s climate-neutral blockchain is ready for explosive growth. NEAR runs in concert with Ethereum, Polkadot, Cosmos, and more, allowing for the free flow of assets and communication between networks for the betterment of all.