Lybra LST Vault & Pool Mechanisms

Vaults and Pool Mechanisms

Understanding why the protocol needs separate vaults and isolated pools to accommodate the variety of LSTs on the Lybra platform requires a grasp of the different types of LSTs that currently exist. The most common types are Rebase LST and Non-Rebase LST.

To address these various types of LSTs, Lybra V2 will establish individual vaults for different categories of LSTs: one vault for Rebase LSTs and another for Non-Rebase (Value-Accruing) LSTs.

Each of these vaults will necessitate a different minimum Collateral Ratio. The Collateral Ratio signifies the relationship between the dollar value of the LSTs used as collateral in the Lybra Protocol Vault and the dollar value of the eUSD/peUSD minted. A minimum Collateral Ratio of 150% will be needed for the Rebase Vault, while the Non-Rebase Vault will also require a minimum Collateral Ratio of 150% (which can be adjusted by the Lybra DAO Vote to 130%).

Within each vault, there will be isolated pools for each specific asset. For instance, the Rebase Vault will have individual pools for stETH, swETH, BETH etc. (which will be seen in Lybra V3, when the main minting contract and liquidation pools are also made available on L2's). Similarly, the Non-Rebase Vault will contain individual pools for WBETH, rETH, and so on.

In order to uphold the rights of governance token holders and to ensure a transparent, decentralized process, decisions about listing or removing individual LST assets will be made via governance votes through the Lybra DAO. Likewise, decisions regarding the vault limit (i.e., the maximum amount of eUSD/peUSD that can be minted for each asset) and emissions for each isolated pool will also be made by the DAO. In order for a decision to be made and implemented, this process will undergo a DAO proposal, subsequent discussions, and a voting phase.

2 new types of LST assets will be accepted upon V2 launch. Check out our Medium article to read moreTo read more, about WBETH and rETH. The addition of swETH as minting collateral will be the first LST asset that will be subject to a DAO proposal and voted upon following the launch of V2.