Mechanism
Stakers earn yield by lending their staked collateral to leverage traders and market makers. We prevent the risk of loan repayment default with our liquidation engine, which liquidates traders in real time when they are margin called.
This staked collateral provided by stakers creates leverage for traders on Tradable and earns yield. This yield comes from an interest paid on leverage trading marked at 14% Annually called the Borrow fee. eg. Sam has 1000USD as trading margin and selects 10X leverage to trade, to trade, he borrows 9000USD from the vault and pays a 0.0004% fee per 15mins(14% annualized) on his position, this fee goes to stakers.
Stakers enjoy the ability to stake in two different vaults;
- Stablecoin Vault
- Multiple Collateral Vault (MCV)
The Stablecoin Vault allows users to stake the three accepted stablecoins(USDC, USDT, and BUSD), which earn interest from lending to traders and Market Makers.
The Multiple Collateral Vault allows users to provide their existing positions in different protocols across different chains as liquidity.
LPs on most high APR platforms suffer some impermanent loss on their positions. With tradable, those Impermanent losses could be offset by re-utilizing already staked liquidity (e.g., my ETH-USD Uniswap LP) as collateral on tradable, without leverage or high risk.
Each collateral bears a weight tagged the Risk Mitigated Value, which signifies the safe value of a staked position that could be used as collateral to support trades.
Eg; if Sam stakes his $10,000 ETH-USD Uniswap LP on Tradable, he makes revenue from Uniswap as a liquidity provider and gets additional yield on top of his position's risk mitigated value ($4,000 in this instance). This $4000, the RFV, is lent to market makers and traders as trading collateral.
Risk Mitigated Value: Most Collaterals in the MCV remain locked in their various protocols but are staked on Tradable. To ensure that trade value is maintained, we would score the assets based on how much USD value the protocol could liquidate from them to support trading.
Each New Vault opened on Tradable would have a calculated risk mitigated value already displayed, with a link to how we got the value.
To utilize these vaults,
- Stakers can choose a vault (e.g., vault) and deposit their available collateral.
- The vault would have already been assigned a risk-mitigated value, and they will receive yield based on that value.
- Their yield on each vault depends upon utilization. If Vault A is completely utilized, vault A stakers would receive a stable yield (~14%).
- Stakers can withdraw unutilized collateral at any point in time. Withdrawals make liquidity scarce for traders; this drop in available liquidity increases the Borrow fee traders pay, increasing yield for unstaked positions.
Stakers earn yield in one of two ways;
- Receiving all borrowed fee payments on the platform.
- Receiving 10% of weekly liquidation fees from market-makers that underperformed.
