An over-collateralized ERC-20 stablecoin built on the Platypus stableswap.
PlatypusTreasureis able to use liquidity provider tokens (LP tokens) deposited into Master Platypus or other ERC-20 tokens as collateral to borrow the USD-pegged over-collateralized stablecoin, USP.
At the time of launch, only assets from the Main Pool deposited into Master Platypus can be used as collateral.
USP is created to maximize capital efficiency for liquidity providers on Platypus. LPs deposited into MasterPlatypus can be used as collateral to mint USP.
- Each collateral has its own collateral ratio and liquidation threshold (e.g., USDs = 95% and 90%). A user can borrow his loan-to-value ratio (LTV ratio) up to the collateral factor. It may be liquidated when the LTV ratio surpasses the liquidation threshold. When users unstake LP tokens from
MasterPlatypusor withdraw their collateral from
PlatypusTreasure, it checks if the remaining position satisfies the collateral factor.
- To avoid the dust amount not being liquidated and accruing bad debt in the protocol, the minimum USP borrow amount is $200.
- 0.3% borrowing fees (in USP) will be charged upon minting. (Initially set to 0%)
- A Stability fee will be applied based on the coverage ratio of USP in the Main Pool (Stability fee = coverage ratio^k / 100), where k is set to 8. The fee is 1% APR when the coverage ratio is 100%. (see below for more)
- Minting Protection: For stablecoin collateral, if the oracle reports its price is less than $0.98 (it is about to depeg), USP borrowing is disallowed.
- Supports flash-loan for liquidation.
User A deposits 2000 USDT into the Main Pool and stakes his LP tokens into the MasterPlatypus to farm PTP. At the same time, he can mint up to 1900 USP as the collateral factor is 95%.
Let’s say he mints 1000 USP, and assuming the borrowing fee is 0.3%, the actual minting fee would be 1000 * 0.3% = 3 USP, so he will receive 997 USP, and his debt is 1000 USP. The LTV value of his position would be 50%.
Assuming the stability fee is 1%. One year later, his debt will become 1010 USP. To withdraw all of his collateral, the user has to pay back 1010 USP.
USP stablecoins are listed in the Main Pool, and one of the major factor that affect USP's price is its coverage ratio in the said pool.
When USP's coverage ratio in the Main Pool rises above 100% due to swapping actions, the price of USP will slightly fall below $1. The increase in USP's coverage ratio will then trigger the rise of the stability fee for borrowing USP. Users will naturally swap back other stablecoins to USP to repay their more expensive loans. As USP assets in the Main Pool decreases, the coverage ratio also decreases, thus pushing USP’s price upwards back to $1.
In reverse, lower USP coverage ratio triggers a decrease in stability fee. This will incentivize users when borrowing a larger position and swapping to other stablecoins. In turn, the increase in USP assets will push its price back to $1
To maintain the peg of USP,
PlatypusTreasurecharges an annualized stability fee for users who borrowed USP. The fee, which accumulates block-by-block, increases with the coverage ratio to encourage users to borrow more USP or repay USP debt.
Stability fee versus coverage ratio of USP in the Main Pool:
Stability fee versus coverage ratio of USP in the main pool
Chainlink price oracle is used to fetch the underlying token value.
The value of an LP token is defined as:
This accounts for haircuts collected by the LP token, as the value of the LP token may grow with time. Also, note that the withdrawal fee is ignored in case it is manipulated by flash-loan.
There are currently two sources of revenue: USP minting fee and stability fee, and liquidation penalty.
The second is potential bad debt. Upon liquidation, bad debt may be incurred if the debt is only partially settled while buying the full collateral up for sale, or the liquidation penalty does not cover kick incentive. More on this in the Liquidation section.
The autonomous coverage optimizer automatically retains a part of the revenue from non-USP stablecoins to mint USP and supply to the Main Pool. This is to minimize USP's price fluctuations, increase the Main Pool's TVL, reduce PTP inflation, and lower the risk of bank run.
At the time of launch, portions of them will be kept in the treasury as a reserve in case of a black swan event. In the near future, we will share this with stakeholders, in the form of distributing them to vePTP holders, buy back PTP, etc.