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USDL (Libre Stablecoin)
USDL and Stablecoin Farming Explained
One of the unique features of the Libre ecosystem is the $USDL, the Libre Stablecoin. The major thing that makes Libre Stablecoin unique is that fiat currencies back it. Fiat currencies are currencies issued by central banks. Examples of fiat currencies are the US dollar, Euro, Japanese Yen, etc. Our stablecoin is fully backed by the US dollar, which means users who own any amount of our stablecoin own an equivalent of US dollar worth, e.g., If a user owns 100 USDL, it means they also own 100 USD. We back our currency with fiat because of the scrutiny and regulations that stablecoins currently, and will continue to face.
Where do the fiat currencies come from?
The Libre platform constantly generates revenue from transaction fees and charges for people using our various products. The fees are converted from nonstable assets into stable assets like USDC and then converted to fiat. This means that the cash backs USDL 1:1 in the LIbre Treasury. The USDL in circulation will always be equivalent to the amount of cash in the Libre Treasury. If the treasury holds 5 million dollars, there will only be 5 million USDL in circulation at that given time. Most times, stablecoin users do not know what they are backed by but with USDL, users can verify that what is in the Libre treasury is equal to the USDL in circulation. There will also be a variety of stablecoin vaults in which users can enter. Each vault will have a different percentage of returns, lock-up periods, and the min/max amount of Libre required.
Stablecoin vaults explained
The best way the vaults can be explained is just like the fixed deposit account in the traditional banking system. You’ll deposit a particular amount LIBRE and receive interest paid out in USDL after a set number of days. The Libre vaults are like the decentralized version of a fixed deposit account in which users earn rewards for staking LIBRE tokens. For example, a vault has a 25% return in USDL, a 90 day lockup period, a minimum deposit of 25,000 LIBRE and a maximum deposit of 100,000 LIBRE. Let’s assume that 1 LIBRE is equivalent to $1. The user deposits 100,000 LIBRE and recieves 25,000 USDL (which is equivalent to $25,000) after the 90-day lockup period is completed. The platform will activate a divesting period to ensure that stakers will not be selling their LIBRE tokens immediately after withdrawing from the vault. The divesting period is yet to be determined, but will entail a percentage of LIBRE that is released daily over a set time.
The main goal of USDL
To create passive income for users and provide additional use cases for the LIBRE token. USDL ensures that users are being rewarded for staking in a less volatile asset. In most cases, when a user stakes cryptocurrencies, they tend to be rewarded in assets that come with extreme volatility. In the case of LIBRE, users will get paid in USDL which is a stable USD pegged asset.
There will be a certain percentage of USDL that will be used for Liquidity on LibreSwap and other DEXs so that users can use their USDL as a tradeable asset to purchase other cryptocurrencies. USDL will also be a primary payment method for the Libre marketplace (the Amazon of crypto). Users will purchase gift cards, real-world items, and other essentials from the Libre Dapp.
Last modified 4mo ago
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