Collateralized Debt Position (CDP) — What has TheStandard.io Learned from MakerDAO
MakerDAO is a decentralized lending platform built on the Ethereum blockchain that allows users to obtain loans in the form of the Dai stablecoin, which is pegged to the US dollar. Users must collateralize their loans by locking up a certain amount of Ethereum in a smart contract, known as a Collateralized Debt Position (CDP). This Ethereum acts as collateral and helps to ensure the stability of the Dai token.
However, despite the success of MakerDAO, TheStandard.io has built upon the concept to provide a more efficient, cost-effective, and stable decentralized lending solution. Here’s what TheStandard.io has improved upon:
Cheaper and Faster Second Layer
TheStandard.io has set its end goal to provide a second-layer solution that is faster and cheaper. This will make the lending process more efficient, reducing the cost and time required for users to access loans.
Multiple Assets in One Vault
In contrast to MakerDAO, which only allows for the collateralization of Ethereum, TheStandard.io allows for the collateralization of multiple assets within one vault, such as BTC, ETH, or even precious metals. This provides more stability and security to the lending process as the value of the assets can be spread across multiple assets, reducing the risk of significant losses in case of market fluctuations.
Asset Swapping for Stability and arbitrage
TheStandard.io also allows for the ability to swap assets within the vault, providing opportunities for arbitrage and better stability. For example, if the market value of a certain asset decreases, a user can swap it for a more stable asset, such as a gold-backed token, to maintain the stability of the loan.
Secondary Marketplace for Debt
In addition, TheStandard.io allows for the sale of ownership of the vault, creating a secondary marketplace for debt. This provides more liquidity and allows for a more efficient and cost-effective way of obtaining and repaying loans.
Multiple Currency Output
Finally, TheStandard.io will look to offer multiple currency outputs following the sEURO, such as sUSD and sAUD, etc providing more flexibility and choice for users in the lending process.
In conclusion, TheStandard.io has taken the concept of the Collateralized Debt Position (CDP) from MakerDAO and made improvements to provide a more efficient, cost-effective, and stable decentralized lending solution. By allowing for multiple assets in one vault, asset swapping, a secondary marketplace for debt, and multiple currency outputs, TheStandard.io is set to revolutionize the decentralized lending industry.
