How does SuperStable work?
What is an On-Chain Fixed Deposit?
An on-chain FD is the crypto equivalent of its traditional predecessor. In traditional finance, instead of putting cash under the mattress, a good choice of low-risk investment would be to open a Fixed Deposit (FD) account in a bank and collect interest. An on-chain FD allows a user to earn a fixed yield while also being able to self-custody its receipt and transfer it if needed.
On SuperStable, users can create an on-chain fixed deposit using their USDC. The receipt for their FD is issued as a unique single mint token so that only the token holder can redeem the FD. Since the receipt is a token, users custody it in their wallets and can also transfer ownership by transferring the token. Moreover, the value of the FD on maturity, i.e. the principal + yield in USDC becomes known to the buyer as soon as they lock in the creation of the FD.
This way, with SuperStable, users get the opportunity to buy into a guaranteed yield-paying fixed deposit, whose record is on-chain in form of a unique single-mint token, allowing for self-custody and easy ownership transfer.
Who are Yield Underwriters?
To pay for the yield of the FD, capital is required, which can be supplied by anyone looking to earn by providing liquidity, thus making them a Yield Underwriter. Also referred to as Liquidity Providers (LPs), Yield Underwriters will be getting value from different revenue streams which combined together will exceed whatever yield they underwrite. (Please note that Underwriters receive LP tokens against the liquidity they provide in USDC at a 1:1 ratio.)
In particular, LPs will be able to:
Stake their LP tokens to accrue $SB tokens, which can further be staked in different pools to stack further yields
Benefit from the yield generating activity of Trader's Pool capital deployed for external farming
Always realise a fee on each trade by the FD holders of the LP pools they deploy their capital into
For Yield Underwriters: While the different revenue channels for Yield Underwriters have been listed above, maximum rewards stand to be claimed via the staking of LP tokens as well as the $SB rewards received into their requisite staking pools.
Where do the Yields come from?
Different participants get their yields from different sources. To understand how the entire system works, we need to remember the following 2 principles:
FD holders get a guaranteed fixed yield
Liquidity Providers get a variable yield
A buyer creates their on-chain FD by depositing their USDC to the SuperStable smart contract. USDC from all buyers is held in what the system calls the Trader’s Pool.
The fixed yield of the FD holder comes from the LP or Yield Underwriter. As soon as an FD is created, its yield(i.e. the interest on FD’s principal amount) is reserved from the LP Pool, thus ensuring the guarantee of full payment (principal + yield) on or after maturity.
Yield Underwriters get LP pool tokens at a 1:1 ratio against the USDC they deposit into an LP Pool(different pools to fund yields for FDs with different maturities). Once the yield has been reserved from this pool, it can’t be considered part of the LP Pool’s capital. If left unchecked, it will de-peg the LP Pool token’s price.
Now, we have two problems to consider:
What should be the rate for the fixed yield
How should the LP Pool token’s price peg be maintained
Both these problems get solved by what the system does next. Using a risk management framework baked into the SuperStable on-chain logic, the system enables the self-adjusting deployment and redeployment of Trader's Pool capital across non-algo stablecoin farms on both Solana protocols as well as cross-chain via WormHole(Portal Bridge). Farmed rewards are then used to maintain the peg of the LP pool tokens issued to LPs as well as ensure LP rewards exceed their interest liabilities. Furthermore, this variable farming rate is what gives rise to the final fixed rate at which yields get paid to FD holders.
Note that the complete deployment/redeployment of the capital of the system is transparently done and can thus be viewed as such on the requisite blockchains.
Who can add Liquidity?
Anyone can provide liquidity in USDC to the platform. They can choose from pools with different durations (currently 30-Day & 90-Day LP pools). Any supplied USDC is deposited into the associated SPL Account of that particular LP Pool. In return, the Liquidity Provider will get back LP Tokens of that Pool at the Add Liquidity Price. For withdrawing their liquidity from a pool, the LP will need to deposit the LP tokens for the associated pool, with Remove Liquidity Price being used to calculate how much USDC is withdrawable for their LP tokens.
How is the price of LP Token decided?
Both the Add Liquidity Price and the Remove Liquidity Price of the LP Token for a pool are determined by the liquidity in that LP Pool and the total LP Token issued for said pool.
Add Liquidity Price = 1
Remove Liquidity Price = Adjusted Liquidity/Total LP Tokens issued
How to start your on-chain FD?
Traders are able to create on-chain FDs on the platform as long as they have the required tokens to do so.
To create their on-chain FD, USDC, $SB token, as well as SOL, will be required. Traders will have to pay a fee (in USDC and $SB) to enter open the FD as well as the associated network fees in SOL. On top of a fixed yield based on the FD’s maturity(currently 30 Days and 90 Days), traders will also earn additional flexible rewards to maximise the yield on their trades in the form of $SB tokens. In exchange for USDC, traders will receive a receipt in the form of a single-mint token. Traders will own this receipt token in their SPL wallet and will be free to transfer it to any Solana address. If a trader wishes, they may even transfer ownership of their receipt token. Whoever owns the receipt token can redeem it for the full FD Value (Principal + Interest) at the point of redemption or at any point before maturity for a value less than the full FD Value. Currently, the automatic roll-out of the principal for an FD is not supported. It needs to be done manually by redeeming the FD and opening a new on-chain FD.
What is "2X Yield Boost Activated"?
Each day or cycle will be considered to last from 00:00:00 UTC till 23:59:59 UTC, within which at any random moment, "2X Yield Boost will activate". This means traders will get a chance at a yield bonus of up to 2 times the normal FD yield. This will be determined by the total value of the associated SuperStable Pool and the amount of a given trade. Note that the maximum yield can be 2X of the given yield or 10% of the pool and will never exceed the latter under any circumstance. Based on these conditions, the net boosted yield is calculated and displayed to the users.
The "2X Yield Boost Active" period will last from the point it springs live till the end of the cycle. For instance, it may become active at 00:00:05 UTC or at 23:59:54 UTC. In both cases, the "2X Yield Boost Active" period will conclude at 23:59:59 UTC, or the SuperStable Pool hits a minimum threshold.
How to transfer Receipt Tokens & claim transferred Receipts?
Users will be able to transfer their Receipt Tokens from one wallet address to another. To do so, all that is required is a valid SPL address for receiving the Receipt Token and payment of the requisite gas fees for the transaction. The receiver will need to claim any transferred Receipts since such transactions will happen independently of the SuperStable platform. This is important as any $SB rewards associated with the Receipt Tokens will continue to accrue to the Receipt sender's account till the new FD owner claims the transferred Receipt Token.
The original owner of the FD will be able to claim rewards till the claim process of the transferred Receipt Token has not been completed by the new FD owner. Do note that any unclaimed rewards by the original FD owner will simply stay put in the rewards pool once the transfer-including the claim- has been completed.
$SB rewards for the new FD owner will begin accruing to their account after claiming the transferred Receipt Token. Once claimed, the FD will be displayed under the user's FD receipts collection on the SuperStable platform. Users can refer to this guide to see how to claim their received Receipt Tokens.
How to Redeem an on-chain FD?
Whoever owns the associated Receipt Token for a SuperStable on-chain FD, is the owner of that FD. The owner of a valid on-chain FD can redeem it for USDC at any time. The Receipt Token for a redeemed FD will be burnt immediately.
How to Stake on the SuperStable Platform?
Users can earn yields via different staking pools on the platform. Holders of various LP tokens(like 30-Day Pool LP tokens or 90-Day Pool LP tokens), as well as $SB tokens, can choose from the following requisite pools:
30-DAY POOL
90-DAY POOL
$SB POOL
All rewards will be in $SB tokens, which upon claim will be sent to the user's SPL wallet. To both stake into and unstake from any pool, fees in form of the appropriate LP token plus SB or just SB will need to be paid, alongside any network fees in SOL for the associated transactions.
How to claim rewards on the SuperStable Platform?
To claim any rewards on the platform, whether be it $SB rewards or 3rd party token rewards(from external farming), users will have to approve a 'claim rewards' transaction and pay the requisite network fees.
Do note that staking/unstaking $SB tokens will automatically claim any unclaimed $SB rewards. Similarly, staking/unstaking LP pool tokens will also automatically claim any unclaimed 3rd party token rewards.
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