Staking to the Stability Pool

Stake trenUSD to earn yields and protect the overall protocol.

The stability pool is the first line of defensive in case there is a position that cannot be liquidated in the event that there is not enough liquidity.

The stability pool acts as a defence mechanism, designed to manage liquidations efficiently and stabilize the system under stress. Its primary function is to handle cases where positions become undercollateralized, often triggered by a significant drop in the collateral token's price.

The Purpose

The core purpose of the Stability Pool is to act as a buffer against potential debt arising from liquidated collateral. When a loan is identified as undercollateralized, the protocol initiates a liquidation process. Here, the Stability Pool plays a vital role by absorbing the debt of the liquidated loans in a decentralized and efficient manner, thus safeguarding the protocol's health and the peg of trenUSD to the US dollar.

Deposits

Users can deposit trenUSD into the Stability Pool. By participating, depositors contribute to the overall health and stability of the system. In return for their contribution, depositors earn rewards

Rewards

Depositors in the Stability Pool receive several types of rewards:

• Liquidated Collateral: When a collateral position is liquidated, the Stability Pool depositors receive the actual liquidated assets. For example, if a borrower's Pepe collateral is liquidated, depositors will receive Pepe tokens as part of the liquidation profit.

• Stable Yield Incentives: Following the release of our native token, TREN, depositors will earn a stable yield in the form of TREN tokens. These incentives are designed to reward users for their role in maintaining the protocol’s stability and are distributed based on their contribution to the pool.

• Partnered Incentives: Additionally, through strategic partnerships like that with Mode Network, depositors may also receive external incentives such as Mode tokens. These partnerships are aimed at enhancing the benefits for Stability Pool participants, thereby encouraging longer-term and more substantial participation.

Please note that by staking to the stability pool, your position will be at risk of being slashed.

How to Stake

Step 1

Get Started

To begin staking in the stability pool, first navigate to the “Earn” section of the platform.

Step 2

The Stability Pool

At the bottom of your screen, you'll see a prominent box labeled “Stability Pool.” This is the area where you will be able to stake your trenUSD.

Step 3

Deposit Button

Click on “Deposit”.

Step 4

Enter the Amount to Stake

Clicking on "Deposit" will trigger a popup where you can input the amount of trenUSD you wish to deposit. You can manually enter the amount or use the “Max” button to automatically select all the trenUSD available in your wallet. Initially, the pool balance will show as 0 if you haven't staked any trenUSD yet.

After specifying the amount to stake, for example, 2,000 trenUSD, click on “Deposit trenUSD” A prompt from your wallet will appear, requesting you to confirm the transaction. Confirming this will initiate the deposit of your trenUSD into the Stability Pool.

Step 5

Review Transaction

Review the transaction details in your wallet interface, and if everything looks correct, click on “Confirm” to finalize the deposit. This action will officially stake your trenUSD in the Stability Pool.

Step 6

Deposit Confirmation

The transaction may take a few moments to process. Once it's completed, you will see a confirmation popup on the top right of your screen. To further verify the transaction, check the “Staked trenUSD” box; it should now display the amount you have just deposited, confirming that your trenUSD has been successfully staked in the Stability Pool.

Claiming Rewards

Claiming your rewards is a straightforward process. Simply click on the "Claim Rewards" button. Your rewards will be paid out in the same asset that was used as collateral from the liquidated position.

In version 2 of the protocol, we plan to streamline the claiming process. When a position is liquidated, the collateral will be automatically converted to TREN, allowing you to claim your rewards in TREN. This will reduce the risk of claiming volatile assets that could change in price between the point of liquidation and the point of claim.