Integrations

Zapper.fi

TO DO

Cover

As we want to bring peace of mind to depositors, we have sought ways to protect our depositors from unexpected events. We recognize that while audits are good, they can only protect depositors on the front-end by exposing smart contract vulnerabilities prior to depositing. They offer, unfortunately, insufficient protection as audits may miss critical vulnerabilities and users may be responsible themselves from recovering from a hack. There have already been cases where audited protocols have been / could have been exploited and user funds drained. Auditors are not responsible for lost funds, so the cost of an oversight is merely reputational. At Stabilize, we want to give depositors more protection.

Enter the Cover Protocol

Cover is a decentralized marketplace where users can buy and sell coverage tokens for a variety of protocols, Stabilize included. It is the catch-all protection for smart contract protocols.

Users can buy coverage tokens on Cover, which are called CLAIM tokens. When the insured period expires without an approved claim, the CLAIM tokens become worthless. If an event does occur (ex: hack, exploit) prior to the end of the insured period, a user can submit a claim that is then evaluated by the Cover protocol (more information here). If the claim is approved, each CLAIM token will be worth 1 DAI. This process is similar to how insurance is handled in the real world.

CLAIM tokens typically cost a fraction of the DAI amount redeemable in case of an event. This is due to the fact that events are typically infrequent. Cover also provides those betting on the success of the protocol an avenue to make money from participating in decentralized insurance. Cover has a NOCLAIM token. These tokens are redeemable 1:1 with DAI when the insured period has expired without an event; however, if an event occurs prior to insurance expiration, NOCLAIM tokens become worthless. Since events are infrequent, these tokens tend to be worth more than CLAIM tokens but less than 1 DAI due to uncertainty. Their condition for redemption are the opposite of CLAIM tokens.

Liquidity providers on Cover are rewarded with trading fees by those buying and selling insurance tokens and they receive COVER tokens by staking their liquidity tokens. Users can simply mint CLAIM and NOCLAIM tokens with DAI, then send those tokens into Balancer liquidity pools to redeem Balancer tokens that can be staked.

How do I get insurance for my deposit on Stabilize?

There are a couple ways to get insurance, either by buying CLAIM tokens directly or minting. 1. Buy CLAIM tokens

  • Press Buy button for CLAIM token. It will bring you to Balancer pool where you can buy CLAIM with DAI for a fraction of the covered amount.

  • You are now covered until the expiration date. If an approved claim occurs prior to that, you can redeem DAI 1:1 with CLAIM token.

2. Mint CLAIM tokens Head to the Stabilize page on the Cover Marketplace

  • Press Mint button and stake DAI to receive both CLAIM and NOCLAIM tokens. 1 DAI will return 1 CLAIM and 1 NOCLAIM token.

  • Sell NOCLAIM token into Balancer pool to redeem DAI. Now you only have CLAIM tokens.

  • You are now covered until the expiration date. If an approved claim occurs prior to that, you can redeem DAI 1:1 with CLAIM token.

How do I make money off others seeking insurance?

There are a couple ways, the first way is by providing liquidity and the second is by becoming a coverage provider.

1. Become a market maker and provide liquidity

  • Head to the Stabilize page on the Cover Marketplace

  • Press Mint button and stake DAI to receive both CLAIM and NOCLAIM tokens. 1 DAI will return 1 CLAIM and 1 NOCLAIM token.

  • Add to both CLAIM and NOCLAIM Balancer pools to redeem BPT tokens. You will begin to earn trading fees.

  • Stake your BPT tokens in Cover’s shield mining program to start earning COVER tokens.

2. Become a coverage provider

  • Head to the Stabilize page on the Cover Marketplace

  • Press Mint button and stake DAI to receive both CLAIM and NOCLAIM tokens. 1 DAI will return 1 CLAIM and 1 NOCLAIM token.

  • Sell CLAIM token into the Balancer pool to redeem DAI. Now you only have NOCLAIM tokens.

  • Optionally, add to the NOCLAIM Balancer pool to redeem BPT tokens. You will begin to earn trading fees. Stake your BPT tokens in Cover’s shield mining program to start earning COVER tokens.

  • At the end of the expiration date, you can redeem DAI 1:1 with your NOCLAIM tokens if there wasn’t an approved claim. You will have earned what you put in plus profit from selling CLAIM tokens.

Developing an industry standard

With the introduction of insurance to Stabilize, the protocol is heading towards what will become an industry standard for DeFi yield aggregators. This year has been defined by many protocol hacks and exploits that have made many hesitate to try DeFi and we believe if we can offer depositors with insurance options, we will be closer to what is already standard in the real world.

Chainlink

Stabilize has completed an integration with market-leading oracle network Chainlink live on mainnet to determine STBZ yield distributions to depositors based on the price movements of various stablecoins, wrapped assets, and seigniorage tokens. The integration involves the use of the Chainlink Price Feed oracles to obtain secure and reliable price data on-chain for the following assets: ETH, sUSD, USDC, USDT, and DAI.

Chainlink is a decentralized oracle network that currently secures over $6 Billion in value across leading blockchain applications, including DeFi protocols like Aave, Synthetix, and now Stabilize. Unlike other oracle options, Chainlink oracles provide manipulation-resistant price feeds, with many levels of data and oracle aggregation to protect Stabilize from flash loan attacks, flash crashes, and any type of downtime or malicious activity from any single node or off-chain data source.

These networks are secured by numerous independent, security-reviewed, and experienced blockchain DevOps teams, which serve to prevent Sybil attacks. Additionally, each Price Feed is accompanied by transparent visualizations based on on-chain activity, which anyone can monitor to audit the performance of individual nodes and the oracle network as a whole.

The Chainlink integration empowers the Stabilize team to continually invent new ways to take advantage of the DeFi market, without having to worry about oracles and price feed manipulation. In addition, the team can take advantage of tools created from other Chainlink technical integrations (such as Graph) to create strategies that can take into account market slippage on-demand before executing certain strategies.

As the real world gets more incorporated into the blockchain world, there will be even greater opportunities that will present themselves. The Stabilize team will explore additional opportunities to leverage the wide range of datasets and oracle functions of the Chainlink Network in order to easily and quickly support new assets and strategies on Stabilize.

Tornado

Stabilize has integrated privacy protocol Tornado.cash as we believe it can help keep stablecoins fungible and give depositors the ability to keep their stablecoin balances private.

Why is this important?

This addition makes Stabilize the premier location to park stablecoins for those who want to maintain the privacy on their deposits. It is very similar to a bank, where you deposit your money into a private account and when you are ready to withdraw, you provide proof of deposit to receive your money back. In this case, you deposit your stablecoins into a smart contract and receive a note. You will eventually use that note to withdraw the same quantity to an address of your choosing. Observers would be unable to connect your deposit address to your withdraw address.

Why not just use Tornado directly?

Tornado currently relies on the usage of relayers to complete withdrawal requests for depositors. Relayers are ran by volunteers who keep servers up to accept requests from those who want to withdraw. The uptime of these relayers vary and the deployment of a new relayer can be tricky for a novice user. If all the relayers are unavailable, the depositor must manually withdraw their coins from the contract and potentially lose his/her anonymity. Stabilize will introduce something called marketplaces, a place where users are incentivized to complete others’ withdrawal requests. This system will not rely on relayers, but rather on users who want to make a quick profit by executing a transaction on behalf of another and earning a withdrawal fee. Users simply post their withdrawal requests specifying the recipient address of the deposited funds and the fee to the marketplace without spending any gas and other users can execute those withdrawal requests to earn the fee.

How does this help stabilize stablecoins?

At the time of withdraw, a part of the withdraw fee will go to the Stabilize Treasury.

The minimum fee for withdrawing will be a percentage of the stablecoin deposit amount. If the stablecoin that is being withdrawn is below its peg, the fee will higher to withdraw than if the stablecoin is above its peg. This is done to encourage selling of stablecoins that are too scarce to bring them back down to their peg.

AAVE Integrated Pools

The Stabilize Protocol has integrated Aave lending pools to further provide benefit to stablecoin depositors on Stabilize. Depositors will earn interest from their deposits via Aave lending pools while simultaneously earning arbitrage profits and STBZ rewards for participating in our zs-USD pool.

On the "Wrap" page, users can deposit tokens into the zs-USD wrapper to earn arbitrage profits and AAVE lending rewards. Users will receive wrapped tokens back representing their deposit. They can then deposit these wrapped tokens into the Stabilize zs-USD pool to start earning STBZ rewards. When they are ready to redeem their underlying asset, users can withdraw their wrapped tokens from the pool, unwrap them through the website and receive the underlying asset plus interest.