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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 as collateral.
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.
What are eUSD and LBR?
eUSD is an interest-bearing stablecoin hard-pegged to the US dollar, using only ETH & stETH as collateral with an excess collateral ratio of 150% to maintain safety and decentralization. eUSD generates stable interest powered by LSD.
LBR is the native token of Lybra Protocol. Lybra Protocol is managed by people worldwide who hold LBR.
How can eUSD stability be ensured?
eUSD stability is maintained through a combination of overcollateralization, liquidation mechanisms, and arbitrage opportunities. These factors work together to ensure that the value of eUSD remains close to its 1 USD peg. For more details, see here.
What are the key benefits of Lybra?
- eUSD holders receive stable interest with a base APY of ~8.1%.
- Zero loan interest - There's no borrowing interest when minting (borrowing) eUSD, allowing users to go leveraged long on ETH with zero loan cost.
- Immutable - Lybra's contract cannot be updated. Only Redemption Fee, Keeper Reward, and LBR shared revenue can be modified according to the LybraDAO community, which does not affect Lybra Vaults' security.
Does Lybra charge any fees?
There are no borrow fees or interest on Lybra Protocol.
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 and rewards in LBR.
- Provide eUSD/ETH LP to earn LBR.
- Hold LBR to share Lybra Protocol revenue.
- Become a Liquidator or Liquidation Keeper to earn ETH.
Why would I deposit my ETH on Lybra to mint eUSD?
- 1.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.
- 2.Simplified collateral: Lybra only accepts ETH and stETH 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.
- 3.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.
- 4.LBR rewards: By using Lybra, you can earn LBR rewards in addition to stable interest income. Holding LBR tokens may offer additional benefits within the Lybra ecosystem.
Is ETH the only collateral accepted by Lybra?
Yes, ETH and stETH 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 stETH) through Lybra.
Then you can mint eUSD against your collateral up to a collateral ratio of 160%.
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, as long as you maintain a safe collateral rate.
What is Liquidation?
To ensure that the entire stablecoin supply remains fully backed by collateral, once your collateral rate falls below the safe collateral rate, you risk being liquidated at any time.
Borrowers (minters) with a collateral rate less than 150% of the minimum collateral rate 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 ETH whenever I want?
As a general rule, you can withdraw your deposit at any time. There is no minimum lockup duration.
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.
What oracle are you using to determine the price of ETH?
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/stETH. 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.