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dTRINITY

dTRINITY is a protocol designed to reduce borrowing costs and provide sustainable interest rates, thereby improving looping strategies for yield-bearing assets like , sUSDe, and . [1]

Overview

dTRINITY is a decentralized protocol that delivers lower borrowing costs, sustainable yields, and essential infrastructure on new and ecosystems. Launching in Q3 2024, it will initially operate on , a network that offers native blockspace incentives. dTRINITY has three core components: dUSD , dLEND money market, and dSWAP , along with the TRIN . dUSD is a community-centric US Dollar stablecoin on the network, redeemable for or , facilitating on-chain transactions and on/off-ramp activities, with yield from its collateral reserve subsidizing borrower interest rates. dLEND, a fork of , supports collateralized lending/borrowing of dUSD and other digital assets, while dSWAP, a fork of , enables efficient trading and collateral liquidation, with dUSD as the base pair. [2]

Fraxtal

is an (OP) Stack modular featuring "fractal scaling." It is an -equivalent using the OP stack for its smart contract platform, enabling secure, cost-effective application deployment similar to like and . is modular, incorporating multiple components and middleware for other chains and networks, and currently employs a data availability module developed by the Core Team. It offers blockspace incentives (Flox) that reward users and developers with FXTL points for spending and interactions, which are convertible to tokens. The native token is from , allowing users and like dTRINITY to earn FXTL points for additional incentives. [3]

Features

dUSD Stablecoin

dTRINITY USD (dUSD) is a decentralized, US Dollar-pegged stablecoin fully backed by on-chain collateral assets. The dUSD collateral reserve includes stablecoins like FRAX and USDC as well as yield-bearing assets such as sDAI and RWA (real-world asset) tokens. [4]

Each dUSD is backed by 1 USD worth of collateral and can be minted or redeemed permissionlessly through smart contracts. [4]

dUSD aims to provide a secure on-chain store of value with unique benefits for its borrowers, lenders, and liquidity providers. By utilizing a diversified and non-custodial collateral reserve, dUSD can maintain stability and independence from the traditional banking system while providing 24/7 transparency to its users. [4]

Utility

dUSD is dTRINTY’s native stablecoin and unified liquidity layer, serving as the base pair for both dLEND and dSWAP. Unlike centralized stablecoins that do not externalize the float income from their reserves, dUSD prioritizes the dTRINITY community by sharing a majority of its float income as interest rate subsidies to stimulate growth and adoption of the protocol. [4]

This approach reinforces a community-centric model where the success of protocol translates directly into enhanced value for community members as both dTRINITY and dUSD continue to scale. [4]

dLEND Money Market

dLEND is a collateralized lending market fork of on , allowing users to borrow against their and to borrowers in return for continuous interest payments. It supports various financial strategies, including leverage, short positions, and hedging, focusing on yield looping strategies. [5]

The protocol facilitates collateralized lending and borrowing of dUSD and other digital assets on . dUSD borrowing rates on dLEND are regularly subsidized to stimulate demand and utilization, generating sustainable yields for dUSD lenders alongside other protocol and network incentives. [5]

On dLEND, lenders earn interest on their lent capital when borrowers utilize it, often resulting in loans paying a higher than what lenders earn. Interest rates for lending and borrowing are determined by utilization rates, with higher rates incentivizing borrowers to repay loans and attracting more lenders, ensuring liquidity for new borrowers. [5]

Borrowing Subsidies

Borrowing dUSD benefits from subsidies, making it the most cost-effective option against . Projects on dLEND can further boost usage by rewarding lenders or borrowers with additional tokens. dTRINITY's governance can introduce new reward tokens for current markets, incentivizing user participation. Due to these subsidies, dUSD's borrowing might fall below its supply , leading to higher utilization rates than in non-subsidized markets. [5]

dUSD Markets

dUSD is the designated for borrowing on dLEND, offering borrowers consistent and lower borrowing costs without switching between . This simplifies the borrowing process and ensures lenders benefit from sustained utilization and higher yields, supported by ongoing borrower subsidies. [5]

Oracles

dLEND utilizes a mixed approach depending on market conditions. It primarily relies on for assets with extensive external price discovery venues. For assets exclusive to or lacking liquidity on external markets, dSWAP is the price . If prices are outdated, dSWAP also acts as the fallback . [5]

Liquidation

Borrowers on dLEND face potential liquidation if their loan-to-value (LTV) ratio drops below a specified threshold, which varies by market. To avoid liquidation, borrowers can add more collateral or repay a portion of their debt. When liquidation occurs, both the liquidator and the protocol levy a fee, the amount of which depends on the specific market involved. [5]

dSWAP Exchange

dSWAP operates as a CLMM (concentrated liquidity market maker), a variant of tailored for . Unlike traditional , CLMM allows to concentrate their capital within specific price ranges, maximizing efficiency by focusing liquidity where it's most needed, typically around current market prices. This setup reduces and enables larger order sizes, which is particularly beneficial for and pegged-asset swaps where price stability is critical. earn trading fees, receiving full fees on dUSD pools and sharing fees on other pools, with 50% going to protocol revenue. Emphasizing dUSD pools enhances trading efficiency by minimizing transaction hops and lowering fees, benefiting and traders alike. [6]

DeFi FlyWheel

dTRINITY’s FlyWheel is designed to attract liquidity and user activity through exogenous and endogenous incentives, scaling sustainably with growth. The protocol incorporates the ve(3,3) framework to enhance interaction between governance token holders and supply-side participants, such as lenders and providing dUSD liquidity. [7][8]

Exogenous incentives include dUSD rewards and subsidies, FXTL network rewards, and incentives from ecosystem partners. Endogenous incentives include TRIN token/point rewards and protocol fee sharing with vote-escrowed TRIN (veTRIN) token holders post-TGE. [7] wiki

Yield Looping

Yield "looping" involves leveraging yield-bearing assets like as collateral to borrow . These are then reinvested in more of the yield-bearing asset, amplifying exposure with leverage. This strategy can be profitable if the yield generated exceeds borrowing costs. [9]

dTRINITY enhances this process by integrating dUSD with components. Thanks to its float income, users can supply yield-bearing to dTRINITY to borrow dUSD at subsidized rates. This setup enables more efficient leveraging and lower borrowing costs, enhancing the yield looping experience. [9]

Partnerships

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dTRINITY

Commit Info

Edited By

Edited On

August 8, 2024

Reason for edit:

updated infor with dUSD stablecoin

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