Using the Sweep warmup release

Andy Singleton
Sweepr
Published in
6 min readSep 27, 2023

The “Warmup” release will help us test and improve the operation of Sweep protocol. You can try today’s release with the Sweep dashboard app.

This release starts with an interest rate of 1%. Yes, that’s not fun. We don’t want to attract Sweep buyers until we have proven the reliability of Sweep operations. When we are ready, it will be fun! You can try it out now with small sums.

This release starts with some simple DeFi assets. Over the next month, you will see the list of assets expand to include “RWA” (tokenized treasuries and money market assets) and additional DeFi strategies. You can even apply to fund your own leveraged dollar yield strategy.

Using the app

Use the Sweep dashboard app to:

  1. Select your current home blockchain
  2. See current SWEEP pricing
  3. Buy or sell SWEEP in a local AMM
  4. Move SWEEP to any participating chain
  5. See the real-time status of local assets
The full app

Select your home blockchain from the top bar

See current Sweep pricing

The “Target price” of $1.00085 is the price that Sweep wants to maintain in the AMM. A dollar stablecoin uses an unvarying target price of $1.00. The Sweep target price increases each day.

The “Interest Rate” of 1.01% controls the change in the target price.

Sweep adjusts this interest rate each week to balance the demand for SWEEP from savers with the demand to borrow and sell SWEEP from borrowers. If SWEEP is consistently below the target price, it increases the interest rate. If SWEEP is consistently above the target price, it reduces the interest rate. This dynamic adjustment should, over time, result in a greater volume of SWEEP.

The AMM price of 1.00016 is the actual price quoted by the local AMM.

In this case, the AMM price is a little bit less than the target price, but still within range of the allowed spread. So, the system shows “minting” is allowed. Local borrowers can mint, borrow, and sell Sweep. If the price is too low, Sweep will turn off minting and show “repaying”.

A button in the top line shows “Buy at 1.00185”. You can always buy SWEEP from the “marketmaker” at a price that is a little bit more than the target price. The prevents SWEEP from depegging to the upside. It makes SWEEP available to savers who want to grow the protocol, and to borrowers that want to buy it back and repay their loans. It puts USDC back into the AMM at the target price. Borrowers can immediately buy this USDC and invest it.

Buy or sell in a local AMM

In this case, you will get a better deal from Uniswap. We are using Uniswap V3 with concentrated liquidity. Select the “Swap on Arbitrum” button to see the local AMM.

Move SWEEP to any participating chain

The system has minted 14,601 SWEEP, but only 7,096.78 SWEEP are on our local chain, Arbitrum. You can move Sweep between chains by selecting the “Sweep Bridge” button.

This feature calls LayerZero to burn on the source chain and mint on the target chain. The SWEEP tokens will end up at the same address on the target chain. You have to pay gas for both sides, which can be tricky if you are sending to the expensive Ethereum mainnet. However, it’s fun if you are moving around between less expensive L2s. You get interest-bearing collateral to use on the target chain. We will be negotiating a wide range of uses for this collateral.

You can help the protocol by moving money, buying on a low-priced chain and selling on a higher priced chain.

See the real-time status of local assets

Every SWEEP that exists has to be minted, borrowed, and REPAID by some leveraged asset vault. This is the same mechanism used by DAI and other CDP coins. Sweep uses vaults called “Stabilizers”. The Asset list shows all of the local Stabilizers.

We are showing three assets here.

Uniswap asset is a protocol-owned Stabilizer. We boot up the system by minting some SWEEP and putting it into am AMM. That gives everyone else a channel where they can mint and redeem. In this case, Sweep put in $4000 of equity, and borrowed 4000 SWEEP, and put those assets int a Uniswap.

USDPlus is a dollar yield strategy from aggregator Overnight. Each stabilizer has a single borrower who can leverage an asset like USDPlus, put in first loss “equity”, and watch it carefully. In this case, our in-house borrower put in $1000 of equity, and borrowed 3000 SWEEP. The Stabilizer sold this SWEEP to the AMM, and invested the proceeds in USD +, holding the resulting coins as collateral. The actual Stabilizer is a bit complicated because it has to swap the new native USDC that Sweep is using, for the old USDC.e that Overnight uses. This shows how borrowers can deploy stabilizers that include customized strategies.

Market Maker is a protocol-owned Stabilizer that provides SWEEP at Target Price plus a spread, and buys it back at Target Price.

Each stabilizer has some “Call” status values. If the AMM price is below the Target Price, the protocol will call some loans, forcing borrowers to buy back and repay Sweep. In the case of a DeFi coin like USD+, the protocol can often get money back in real time. But what if the money is placed into off-chain securities? In that case, we can use the Stabilizer to “call” the loan, but we might have to wait a few days while the tokenized security provider sells some securities and settles a trade. You can track the progress of that activity with the call time (when Sweep made the call), call delay (the amount of time that we agreed to wait for money, when we set up this Stabilizer), and call amount.

If necessary, Sweep Protocol can use the call mechanism to return every dollar within seven days.

A Stabilizer can go to “defaulted” status if the equity is less than the minimum agreed value, or if it goes beyond the call time. Then protocol will force liquidation and take any remaining equity. Here are some status values, including values like ‘deprecated” that will never appear on the dashboard.

Analytics

Future releases of Sweep will include an analytics app that shows all of the Stabilizers on all blockchains. It will show a complete real time view of the protocol balance sheet.

Collaborate to grow the on-chain economy

Sweep Protocol has a mission to grow the on-chain economy. Please stay in touch through Discord or Twitter.

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Andy Singleton
Sweepr

Software entrepreneur/engineer. Building DeFi banking at Maxos — https://maxos.finance . Previously started Assembla, PowerSteering Software, SNL Financial.