Source: Adobe/Sergey Nivens
One of the currently most popular projects in the decentralized finance (DeFi) space, yearn.finance (YFI), revealed StableCredit, a new protocol for decentralized lending, stablecoins, and automated market makers (AMMs).
"StableCredit is a protocol that combines tokenized debt stable coins, lending, AMMs, and single sided AMM exposure to create a completely decentralized lending protocol," said yearn.finance Founder, Andre Cronje, in the latest product announcement.
Following more detailed explanations of each of the components mentioned in the combination above, Cronje added that a user can provide any asset and create tokenized credit called StableCredit USD, though other currencies are also supported, such as EUR and JPY.
The process starts once a user provides a certain amount in USD coin (USDC), after which a USDC price oracle is used to determine the USD value of 1 USDC, and the process proceeds to minting x * USD value StableCredit USD, calculating the system utilization ratio of the supplied USDC (up to 75%), and minting it as StableCredit USD.
"At this point, your StableCredit USD is your "lending credit"," said the developer, which can be used to borrow other assets via the AMM, "so if another user provides LINK as collateral, you can borrow LINK by "selling" your lending credit. When you want repay your debt, you can "sell" the LINK back for StableCredit USD, pay off your debt, and receive your USDC."
Makoto Inoue, developer at Ethereum Name Service and Kickback Co-founder, posted a Twitter thread providing a look inside the new idea, stating that though StableCredit is not released yet, "thanks to [Cronje] "testing in prod", we can have a sneak peek of what they have been cooking."
10/17. Here is the flow chart of the entire call stacks. Credit goes to @gnidan for generating the image. It's work in progress feature of @trufflesuite debugger. It has nearly 30 call stacks!! pic.twitter.com/im3gxiarVd
— Makoto Inoue (@makoto_inoue) September 10, 2020
As for when the product will be available, Cronje said that they are "currently finalizing the UI (user interface) and will make it available in the coming weeks."
This latest move comes after the yETH vault for yield farming with ethereum (ETH), which yearn.finance launched earlier this month, seeing immediate interest and activity.
At pixel time (12:46 PM UTC), YFI, ranked 25th by market capitalization, trades at USD 32,158 and is up by 6% in the past 24 hours and almost 15% in a week. Meanwhile, in a few hours on Thursday evening (UTC time), YFI rallied by 20%, reaching USD 34,769, after major crypto exchange Coinbase Pro said that it will support YFI, while trading might start on September 15. However, YFI is not yet available on Coinbase.com.
YFI price chart: