The USDC Engine is here! After several months of development, testing and auditing, one of the most popular stablecoins in the DeFi ecosystem has been given a central role in the use and future development of the RCN protocol, allowing the RCN Credit Marketplace’s users to receive, repay and collect funds in a stable asset. In addition, the USDC Engine has the ability to gather fees from operations within the protocol, which can then be used for multiple purposes.
The Debt Engine is a smart-contract that sits at the heart of the RCN protocol, handling most of its transactions in its namesake token while sourcing data from the rest of its contracts. Up to now, the RCN Engine was the protocol’s only Debt Engine, and while it was perfectly able to support all of its existing features, it lacked some of the advantages offered by a stablecoin-based Engine.
On the one hand, thanks to the steady nature of their price, stablecoins are better suited than non-stable assets to be the vehicle in which value travels through a protocol. When a user receives borrowed funds or collects a repaid loan, those amounts are immediately exposed to value fluctuations. However, when they are deposited in stablecoins the value of those funds remains unaltered, allowing users to receive the amount originally expected regardless of how much time it takes for them to collect it. And on the other hand, stablecoins maintain a closer resemblance with fiat currencies than the average token, which goes very much in line with RCN’s mission of bringing non-crypto-native assets to the DeFi ecosystem.
Of all stablecoins, USDC is one of the most stable, liquid and popular among DeFi users, having the lowest price standard deviation from the USD peg and the second largest market capitalization of all the stable assets in the ecosystem.
How It Works
In order to interact with the USDC Engine, users must enable the features and currencies they would like to use by clicking on the corresponding checkboxes in the General Settings section, or in the specific dialog boxes that will be shown to them whenever it is required.
When lenders collect repaid loans created with the USDC Engine, they will be able to withdraw their USDC using the new Withdrawable Balance tool, where they will also find a button to withdraw RCN from previous loan collections. In addition, from now on, borrowers will be able to receive and repay requested funds using USDC.
In case of repayment transactions, in order to complete them, borrowers will have to pay a 0,15% fee that will be collected by the Debt Engine contract. While the contract allows for this fee to be changed in the future, it can never be higher than 1% nor affect the fee applied to loans created before the change. In all cases, no fee will be applied to loans created with the RCN Engine.
This feature opens up a whole new world of possibilities. For example, the Debt Engine contract is now programmed to collect fees in USDC and send those funds to the recently created Receiver contract, which will accumulate them. Occasionally, this contract will sell all of its stored USDC for RCN using Uniswap’s USDC/RCN pool and send the tokens to the “zero address”, making them irreversibly unavailable. In any case, both the Debt Engine and Receiver contracts allow for these mechanisms to be altered or replaced in the future.
Smart-Contract Security
Since the USDC Debt Engine and the Receiver contracts are highly sensitive from a security point of view, they were both submitted to a double auditing process by two separate auditors. Fortunately, neither of these reviews found any critical issues and all the suggested fixes have already been implemented.
Never miss one of RCN’s updates!
- Visit its Official Website & check the Credit Marketplace.
- Follow it on Twitter, Facebook & LinkedIn.
- Join its community on Telegram.
- Check its code on Github.
- Reach it at contact@rcn.finance & helpdesk@rcn.finance.
