We propose supporting VST on Radiant with a max LTV of 75%. VST is a stablecoin minted directly by the protocol users by opening a vault and depositing ETH, GMX, DPX, gOHM, and GLP as collateral. The variety of Vesta Finance collaterals makes VST one of the most innovative stablecoins currently available on Arbitrum.
Motivation & Rationale
With DAI, USDC, and USDT, Radiant currently has all of the stablecoins available for borrowing presently on the platform are centralized or rely heavily on centralized collateral. Adding VST as a borrowable asset on Radiant would further diversify the protocol from centralized stablecoins and give users on Arbitrum an exciting choice when using the platform.
In addition, VST has strong native demand for lending and would help Radiant onboard users from other ecosystems. VST is the most traded stablecoin on Arbitrum beside USDC, consistently seeing >300k of daily volume in the past six months. VST is backed by Arbitrum leading assets such as GMX/DPX, so having VST onboard will allow Radiant to have attractions to users who hold these assets as well. Also since these collateral are already deployed in different chains like Ethereum/Avalanche/Arbitrium, the liquidity sourced from these chains will also help Radiant’s omnichain vision.
- Overcollaterization: the dollar value of the locked collateral exceeds the dollar value of the issued stablecoins. After opening a vault with some collateral, users may issue (“borrow”) tokens such that the collateralization ratio of their vault remains above 110%. A user with $1000 worth of underlying collaterals in a vault can issue up to 909.09 VST
- Vesta Reference Rate: a variable interest rate applied on VST generator’s debt algorithmically controlled by the token’s peg.
VST is a stablecoin minted directly by the protocol users by opening a vault and depositing ETH, GMX, DPX, gOHM, and GLP as collateral. The available collaterals make VST one of the most decentralized stablecoins on the market.
VST is overcollateralized by its collaterals with two main mechanisms helping it keep its peg. First, Vesta Reference Rate is applied to VST generators that could increase as the peg increases, encouraging people to decrease VST supply. Secondly, there is a minimal collateral ratio for each asset. Both mechanisms create a price floor and ceiling through arbitrage opportunities.
Vesta is committed to ensuring that we provide the best and safest protocol for our users. Our first audit was done by Verilog, a boutique smart contract security firm. More can be found here: https://docs.vestafinance.xyz/audit/audits.
Furthermore, Vesta works with Risk DAO to determine and constantly monitor riskiness of all assets. Vesta has devised our own Collateral Risk Framework for onboarding new assets (learn more about our framework here: Collateral Risk Framework - Vesta). Risk DAO’s methodology is applied in determining the correlating parameters for all collaterals such as mint cap and minimum collateralization ratio (visit Risk DAO’s Vesta dashboard here: https://vesta.riskdao.org/).
- Market Cap
- Average market cap 6 months based on daily close (2022 June 1 - December 1) 679057.08
- Average market cap 1 month based on daily close (2022 November 1 - December 1) 11275498.98
- The average daily volume of the last 6 months from June 1 to December 1 based on the daily interval is 262016.27
- Total volume of VST-FRAX since inception is 84072365.13
- VST consistently trades between 1.01 and 0.98 on our main liquidity pool. The oscillating price encourages activities such as opening and closing vaults to take advantage of the arbitrage (view VST price on Vesta’s Stats page)
- VST token was deployed on 2022/02/07 at 09:05:50 AM +UTC (link to Arbiscan)
Social channels data (Size of communities, activity on Github)
- Discord: 7900
- Twitter: 21k
- Medium: 630
Contracts date of deployments, number of transactions, number of holders for tokens
- For a full list of all contracts, please visit this documentation page
- VST token contract alone has seen 29k transactions and growing. See Arbiscan page
- Holder count: 56,750 addresses and growing. See Arbiscan page
Project - https://vestafinance.xyz/
Whitepaper / Documentation - https://docs.vestafinance.xyz/
Github / source code - https://github.com/vesta-finance/
Ethereum contracts - https://docs.vestafinance.xyz/technical-overview/contract-addresses
Audit - https://docs.vestafinance.xyz/audit/audits
Twitter - https://twitter.com/vestafinance
Discord - discord.gg/vestafinance
Blog - https://medium.com/@VestaFinance
Support - Vesta
Steps to Implement
- Smart contract logic and UX/UI adjustments to be tested in a staging environment
- Upon completion of beta testing, code would go to Peckshield to review
- Upon completion of the audit, implementation would occur upon launch of Radiant v2
Implementation of fee redistribution and changes to vesting would go into effect upon launch of v2, and would deploy on all subsequent Radiant chains (current & future).
Likely some/no/significant maintenance dev cost, no additional structured costs beyond existing time/resources spent in development.