FAQ
What is Lybra?
Lybra Protocol is a decentralized protocol dedicated to bringing stability to the cryptocurrency economy, allowing users to mint eUSD, an interest-bearing stablecoin using ETH and LSTs as collateral and peUSD, representing the underlying DeFi utility version of eUSD amde available Omnichain.
What is the motivation behind Lybra?
Lybra Protocol aims to provide a secure, safe, and fully decentralized interest-bearing stablecoin that is not under any government's authority while benefiting ETH holders of all sizes. A decentralised, uncensored stablecoin, available to all.
What is eUSD?
eUSD is an interest-bearing stablecoin hard-pegged to the US dollar, using only ETH and LSTs as collateral with an excess collateral ratio of 150% to maintain safety and decentralization. eUSD generates stable interest powered by LSTs.
What is peUSD?
peUSD represents the underlying DeFi utility version of eUSD, which can be converted through the protocol at a 1:1 ratio. Borrowers of eUSD who convert their holdings into peUSD, will always have the flexibility to convert peUSD back to eUSD at any time, enabling them to accumulate the interest earned on their deposited collateral.
What is LBR?
LBR is the native token of Lybra Protocol used for Governance and Protocol Revenue Sharing.
How can eUSD stability be ensured?
eUSD stability is maintained through a combination of over-collateralization, liquidation mechanisms, and arbitrage opportunities. These factors work together to ensure that the value of eUSD remains close to its 1 USD peg. Additional peg stability mechanisms have been introduced in V2 of the Lybra Finance protocol to futher ensure the stability of the asset.
What are the key benefits of Lybra?
eUSD holders receive stable interest with a base APY of ~8%.
peUSD represents the DeFi utility version of eUSD. Accrued eUSD yield can be realized instantly when converting from peUSD back to eUSD.
Liquid DeFi-Compatible Asset: While enjoying the yield generated from the underlying ETH and LST asset, eUSD holders can also enjoy a liquid asset, peUSD, which opens the door of DeFi.
Zero loan interest - There's no borrowing interest when minting (borrowing) eUSD, allowing users to leverage long on ETH with zero loan cost.
Immutable - Lybra's contract cannot be updated. Only the Collateral Ratios, Redemption Fees, Keeper Rewards, LST Vault Launching/Emissions and LBR shared revenue can be modified according to the LybraDAO community.
Does Lybra charge any fees?
There are no borrow fees or interest for eUSD borrowers. A 1.5% borrow/repayment fee is being charged for peUSD minters, which will be distributed to esLBR holders.
How can I earn money using Lybra?
There are four different ways to generate revenue using Lybra:
Deposit ETH and mint eUSD to earn stable income in eUSD
Convert minted eUSD to peUSD and always have the flexibility to convert peUSD back to eUSD at any time, so to accumulate the interest earned the deposited collateral
Provide LP to earn esLBR
Hold esLBR to share Lybra Protocol revenue. Protocol revenue has 2 streams as of V2: The annual service fee on the total circulating eUSD, and the peUSD debt repayment fee
Become a Liquidator or Liquidation Keeper to earn ETH
Why would I deposit my ETH on Lybra to mint eUSD?
No borrowing interest: Unlike AAVE and MakerDAO, Lybra does not charge any interest when minting (borrowing) eUSD. This can save you on interest expenses, making Lybra a more cost-effective option for borrowing stablecoins.
Simplified collateral: Lybra only accepts ETH and LSTs as collateral, ensuring a secure and decentralized system. This simplicity might be appealing if you are primarily an ETH holder and want to avoid dealing with multiple collateral types.
Stable interest on eUSD holdings: By minting eUSD on Lybra, you can earn a stable interest with a base APY of approximately 8%. This interest is generated for holding eUSD, allowing you to earn a stable income while maintaining exposure to ETH through your collateral.
LBR rewards: By using Lybra, you can earn LBR rewards in addition to the eUSD stable interest income. Holding LBR tokens may offer additional benefits within the Lybra ecosystem.
Flexbility: By minting eUSD on Lybra Finance, users can convert their holdings to peUSD, the DeFi friendly omnichain stablecoin. Users can then use peUSD with a wide range of protocols on the mainnet and supported L2's, without ever giving up their yield accruing on their underlying collateral. Simple convert back to mainnet, and claim the rebasing yield that has been accumulating over time. peUSD can always be purchased back at a rate of $1.
Is ETH the only collateral accepted by Lybra?
ETH and LSTs backed by ETH are the only collateral types accepted by Lybra to maintain safety and decentralization.
How can I mint (borrow) with Lybra?
To mint (borrow) eUSD, you must deposit a certain amount of collateral (ETH or supported LST's) through Lybra.
Once deposited, users can then mint eUSD and peUSD against your collateral with a minimum collateral ratio of 150%.
When do I need to pay my debt back?
Debts issued by Lybra Protocol do not have a repayment schedule. You can repay your debt at any time, so long as you maintain a safe collateral rate.
What is Liquidation?
To ensure that the entire stablecoin supply remains fully backed by collateral assets, once your collateral rate falls below the safe collateral rate, you risk being liquidated at any time.
Borrowers (minters) of eUSD with a collateral rate less than 150% of the minimum collateral rate (125% for peUSD borrowers) must be liquidated to ensure that the eUSD stablecoin is fully backed by the collateral asset.
The borrower's (minter's) debt is reduced, and liquidators receive the collateral asset in exchange for paying off the debt.
After liquidation, the debt owed by the borrower (minter) has been paid, and the value of the remaining collateral equals 110% of the reduced debt.
Can I withdraw my deposited collateral whenever I want?
As a general rule, you can withdraw your deposit at any time. There is no minimum lockup duration. A 0.1% fee will be imposed on withdrawals made within three days of deposit. This measure is in place to prevent short-term deposits and withdrawals designed to exploit the interest from rebasing yield from rebase LSTs.
I'm a holder of USDT, USDC, FRAX, and/or other stablecoins; how can I get stable interest with Lybra?
It's easy! Convert your held assets to eUSD through any DEX. As long as you're holding eUSD, stable interest is calculated and distributed by Lybra Protocol. You may also want to convert your eUSD to peUSD for wider DeFi purposes, your accrued eUSD yield will be realized instantly when converting back.
What oracle are you using to determine the price of ETH?
Chainlink
I used "Redeem eUSD", but the debt on "Repay eUSD" remained the same. Why?
Redeem eUSD and Repay eUSD are two separate systems. Redeem eUSD is where you exchange your eUSD for a 1:1 USD worth of ETH/stETH. You would want to use this function when there are arbitrage opportunities. For example, when eUSD is below $1 USD, you can buy it on the market and redeem it for ETH or other rebasing LSTs. By doing so, you make arbitrage gains, and as more people buy eUSD to redeem, it helps to re-peg the eUSD price to $1 USD.
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