Protocol Overview

Let's grasp the overview of what TheStandard.io smart contracts do

Smart Vaults Version 4 Our latest vault system, Smart Vaults Version 4, represents a significant step forward in collateral efficiency and user control. The system allows users to lock multiple cryptocurrencies, including Wrapped Bitcoin, Ethereum, LINK, ARB and more, in a single vault to borrow stablecoins pegged to fiat currencies, such as USDs. With Smart Vaults Version 4, users can not only borrow at 0% interest but also earn yield on the collateral held, providing multiple benefits from a single platform. The introduction of yield generation mechanisms through integration with yield-optimizing protocols makes our smart vaults unique in the DeFi landscape.

Arbitrum and TheStandard

Arbitrum is an Ethereum Layer 2 scaling solution designed to enhance the Ethereum network through increased transaction speeds and lower costs. It leverages optimistic rollups to process many transactions off-chain, while still benefiting from Ethereum's security.

Benefits of Arbitrum:

• Scalability: Processes up to 40,000 transactions per second.

• Cost-Efficiency: Significantly reduces gas fees compared to Layer 1.

• Security: Secured by Ethereum's underlying infrastructure.

TheStandard's Choice: TheStandard opted for Arbitrum due to these enhanced scalability and cost benefits, which align with their goal to provide a seamless and financially efficient platform. Building on Arbitrum allows TheStandard to offer users fast and secure operations, while offering the security that Ethereum offers as a base layer.

USDs: The Standard's USD-pegged Stablecoin USDs is the native stablecoin of The Standard protocol, pegged to the value of the US dollar. USDs is designed to be a stable and reliable medium of exchange within our ecosystem. It allows users to borrow against their locked collateral at zero interest, providing liquidity without losing ownership of their assets. The USDs stablecoin is a cornerstone of our liquidity strategy and offers users a reliable, decentralized alternative to traditional stablecoins.

EUROs: Sunsetting and Future Plans We previously launched EUROs, a euro-pegged stablecoin. However, due to the current lack of market appetite for a euro-pegged stablecoin, we have decided to sunset EUROs for the time being. We believe that there will be increased demand for localized stablecoins in the coming years, and once USDs achieves significant liquidity, we plan to refocus on EUROs to meet that demand and further our vision of creating a decentralized forex market.

Liquidity Management To ensure deep liquidity and maintain the USDs peg, The Standard employs a multi-faceted liquidity management approach. Users placing collateral into yield-bearing pools are required to allocate at least 10% of their collateral into a USDs/USDC pool. This approach not only hedges impermanent loss risk for the user while focusing on collecting fees and rewards but also builds deep liquidity for borrowers who want to sell USDs.

Additionally, we incentivize liquidity providers to add USDs and other stablecoin pairs to decentralized exchange (DEX) liquidity pools, using concentrated liquidity pools for better capital efficiency, and leveraging our global borrowing limit to maintain stability. Our strategy ensures that users can easily trade USDs with minimal slippage, making it a highly effective medium for transactions within the DeFi ecosystem.

Coming Soon: Smart Vaults V4.1 Self-Paying Debt Mechanism In the upcoming Smart Vaults V4.1, vaults will be able to pay off their own debt at a discount if there is a depeg of more than 5%. Only the highest leveraged vaults will trigger this mechanism, providing two key benefits: it allows borrowers to pay down their debt at a discount by purchasing USDs below peg value, and it creates buying pressure on USDs to help restore the peg. This innovative mechanism helps ensure that the USDs peg is always maintained while benefiting the borrowers.