Convergent is a protocol operating on Solana that facilitates the creation of USV, a decentralized stablecoin, by over-collateralizing SOL at 0% interest. The protocol also automatically stakes the corresponding SOL on Jito, allowing users to earn staking rewards and MEV yield while holding USV, a liquid stablecoin suitable for leverage or generating additional yield. ^[1]

Overview

Convergent is designed to maintain a 1:1 value ratio of 1 USV to 1 USD with the following features: ^[1]

• 0% Interest Loans: No interest fees are applied to USV borrowers, eliminating concerns about accruing debt over time.
• Yield Generation: USV holders can generate yield by depositing SOL, benefiting from staking rewards and MEV yield through Jito.
• Over-Collateralization: The system ensures that the total value of collateral exceeds the value of issued USV tokens, enhancing stability.
• 100% Decentralized: Convergent operates in a fully decentralized manner, providing resistance to censorship and independence from centralized assets for maintaining peg stability and system solvency.

Interest Bearing Collateral

All SOL deposits within the protocol are automatically staked on Jito to earn staking rewards and MEV yield, with JitoSOL serving as the underlying collateral. Consequently, the protocol does not deduct any portion of the yield earned from Jito, enabling users to fully access their staking gains when they close their positions by repaying their debt, a process referred to as "Diverging." Jito is an MEV infrastructure builder for Solana. ^[2][3]

Nexus

Users can deposit USV to Nexus to earn liquidation gains and CVGT token emissions. The Nexus function is to act as a reserve to settle debts resulting from liquidated positions, ensuring continual support for the total USV supply. ^[4]

Users have the option to deposit USV into the Nexus, allowing them to earn collateral (JitoSOL) from liquidated positions. During liquidation, USV equivalent to the remaining debt of the position is deducted from the Nexus's balance to settle the debt, while the total collateral from the liquidated position is transferred to the Nexus. ^[4]

Converging

Converging involves initiating a Position to borrow USV using SOL as collateral, where the collateral is subsequently converted into interest-bearing JitoSOL. The protocol facilitates zero-interest borrowing through one-time borrowing and redemption fees. These fees are algorithmically adjusted based on recent redemption activity. If there is an increase in redemptions, indicating potential USV trading below 1 USD, the borrowing fee will increase to discourage borrowing. ^[5]

Diverging

Diverging involves closing a Position by repaying it with USV and receiving JitoSOL in return. ^[6]

Liquidation

The Convergent protocol uses the Pyth JITOSOL:USD price feed for accurate collateral valuation and facilitates USV borrowing and liquidation. When a Position's collateralization ratio falls below 110%, it's considered under-collateralized and subject to liquidation. ^[7]

To maintain full backing for the outstanding USV supply, any Position below the 110% collateralization ratio will be liquidated. The Nexus absorbs the debt, and its collateral is distributed among Nexus Deposit users proportionally. ^[7]

Genesis NFT Collection

The Genesis Collection’s purpose is to acknowledge early supporters of the project by introducing Convergent to the Solana NFT + DeFi ecosystem. Over time, AGENTS holders will have access to FRAGMENTS and future offerings, along with integration with the dApp, including protocol fee sharing via staking. ^[8]

USV

USV is a stablecoin pegged to the USD, used for loan repayments within the Convergent system. It can be redeemed against the underlying collateral at its nominal value whenever necessary. ^[9]

CVGT

CVGT is the protocol token of Convergent. Users can stake CVGT to capture a portion of the fees generated by the protocol, which include issuance and redemption fees, distributed proportionally. ^[9]

The CVGT token allows for staking to earn a proportional share of protocol fees, including both issuance and redemption fees. The protocol fee sharing feature becomes active upon the CVGT Token Generation Event (TGE). No fees will accrue to the treasury from the beginning. For example, if 1000 CVGT tokens are staked and an individual stakes 100 of them, they will receive 10% of the protocol fees. ^[8]