$USM Stablecoin — How to Manage the Vault

Stakenode - Polkadot Validator
Standard Protocol
Published in
5 min readMar 8, 2022

Standard $USM is a capital efficient and low-cost Stablecoin solution, and it’s the most important part of DEFI lego, that Standard protocol is developing for the whole Web3 ecosystem.

Standard is a multichain, self—sovereign, multi collateral Stablecoin protocol, that will enable users to mint / borrow $USM Stablecoin by collateralizing assets like $METIS, $ETH, $USDT, $USDC, $WBTC, $UST, and more.

MeterUSD ($USM)will be launching on Metis Andromeda coming March 2022, and further Standard $USM development will bring $USM multichain and available on many networks like Astar, Moonbeam, Polygon, and many more.

Now, Defi ecosystem users can try minting/borrowing $USM on Rinkeby testnet and get familiar with Standard Vault Management to be ready for incoming mainnet launch.

Guide: Mint $USM

Refer to our previous guide on how to mint $USM by with collateral assets:

Guide: Manage Vault:

Now let’s explore how to interact with vault after opening a CDP (Collateral debt position) and manage your position.

Standard $USM Stablecoin Vault Management Functions:

💰 Payback borrowed USM + accrued fees (in USM)
💵 Mint more USM
🏛 Deposit Collateral
💸 Withdraw Collateral

Step-by-Step Guide

First of all, go to apps.standard.tech/vaults, you can interact with the vault you have opened.

This page also gives users an overview of total USM borrowed, total collateralized, number of vaults, and any dangerous vaults.

Your vaults will also be categorized with their safety level — Safe, Warning, and Danger respectively.

After clicking into the vault, users can view more details about their collateral position and interact with Payback, Mint, Deposit, Withdraw.

💰 Payback — To avoid potential or imminent liquidation, or take advantage when USM’s market price is lower than $1.

  • Enter the amount you would like to pay back and approve to close your position.

💵 Mint more — To take advantage when USM’s market price is above $1

  • Step 1: Enter the amount you would like to borrow, in this example, borrow $100 USM.
  • Step 2: Adjust the collateral ratio bar to meet the min collateral ratio (150%) or above
  • Step 3: Confirm the details, and click “Approve USM” to mint more USM

🏛 Deposit — To avoid potential or imminent liquidation adding more collateral instead of payback

  • Step 1: Enter amount to deposit, in this example, 0.1 ETH was collateralized, and additional 0.02 ETH is now added that increasing the collateral ratio from 200% to 240%
  • Step 2: Click “Deposit” to approve your transaction

💸 Withdrawal — Withdraw Up to an amount that leaves a min-collateral amount in the vault

  • Step 1: Enter amount to withdraw, in this example, it had a collateral ratio at 200% originally, and 0.0249 ETH max can be withdrawn and still keeping the new collateral ratio at min. 150%
  • Step 2: Confirm the details and click Withdraw

Every time users borrow $USM, they need to over-collateralize their assets.

In Standard Protocol, we do not own any collateral as a reserve, but rather, our vault contract will create a Collateralized Debt Position NFT in your wallet and lock your assets as collateral before minting the MeterUSD to you.

This approach introduces two interesting mechanics that are unique to Standard Protocol 🚀🚀🚀

  1. Your assets are still with you rather than locking up into our treasury as a reserve like some other stablecoin protocol. This means that if anything bad happened to the protocol, you remain to own your assets. It’s a truly decentralized way of handling collaterals.
  2. Your CDP is an NFT, you keep it, you own it. Compare to other protocols, Standard CDP is recorded under protocol with assets stored in the contract, but Standard Protocol not only let you keep the ownership in a decentralized format, but subsequently unlocking the potential of some other usage, including trading, and staking, enabling richer Defi options which we will explore more later.

To redeem your assets, all you need to do is to visit our vault contract, burn the sufficient amount of MeterUSD plus a few percent of stability fee (paid in $USM as well), then your CDP will unlock your assets and now you can spend them again.

The challenge of every stablecoin is when the collaterals can no longer support the token to stay close to its $1 peg during a bearish market.

Standard Protocol takes a different approach on liquidation: instead of auctioning the undervalued collateral to specific, privileged users, the CDP will be liquidated (partially or completely) directly to our DEX and available to the market to trade.

This is not only a much more capital-efficient way to handle liquidation but also allows users to explore arbitrary, i.e. slightly discounted, tokens on our DEX even during an unpleasant market sentiment.

More info about Standard Protocol tech design and our product $USM, our multichain DEX, and our team can be found on Standard Wiki.

Standard will perform live liquidation event on Rinkeby testnet to explain the liquidation mechanics and we will cover liquidation in this event and separate article afterward.

See You Soon at the live testnet liquidation event and $USM Mainnet Launch. Stay tuned!

About Standard Protocol

Standard Protocol is the first Self-Sovereign Stablecoin protocol that embraces and visions the truly decentralized form of Web3.0. Empowered by its interoperable DAO ecosystem, Standard Protocol empowers its users with full control over its monetary system through a multichain DEX, a decentralized Oracle, and a non-reserve design for CDP using NFT. We’re also a recipient of the Polkadot Web3 Foundation Grant, Polygon #DefiForAll Fund and Shiden Network Builders Program Grant. Standard Protocol strives to innovate as the next-generation digital settlement currency and prides itself on its global movement in self-sovereign finance.

Please click the following links for further more information about the Standard Protocol: Website | Twitter | Telegram Community| Medium | Discord | Clubhouse | Reddit | Linktree