Alchemist Protocol
Overview
IBNSCTrade Alchemists form the cornerstone of the IBNSCTrade protocol, functioning as innovative smart contract hubs. These Alchemists are empowered by the IBNSCTrade.sol contract to optimize yield-bearing asset management. Here's a breakdown of how the Alchemist operates, exemplified with DAI and IBNSCTrade’s synthetic asset, IBN-USD:
Deposit Process
Users deposit yield-bearing tokens like yvDAI into the Alchemist. Direct deposits of underlying assets, such as DAI, are first converted into yield tokens (e.g., yvDAI via Yearn.finance) before being accepted by the Alchemist.
Borrowing Mechanism
Borrowers can take out loans in IBN-USD, up to 50% of the value of their deposited collateral, maintaining a minimum 200% collateralization ratio. This ratio ensures robust security and reduced risk for each loan.
Yield Harvesting and Debt Repayment
Accrued yield on deposited assets is periodically harvested and applied to reduce the borrowers’ debts. This process allows for a natural reduction of debt over time, and for those who haven't borrowed, it increases their IBN-USD borrowing limit.
Transmuter Integration
Harvested yield is transferred to the Transmuter contract, a vital component in the IBNSCTrade ecosystem for managing synthetic assets.
Withdrawal and Loan Adjustments
Users have the flexibility to withdraw their collateral as their debt decreases, or they can choose to readjust their IBN-USD loan while adhering to the minimum collateralization standards.
Debt Repayment Options
Debts can be repaid using either IBN-USD or the underlying stablecoins (DAI, USDC, USDT), with a 1:1 valuation in the Alchemist. This also presents a unique opportunity for users to buy IBN-USD at a discount and pay off their debt when the price of IBN-USD dips below $1.
Self-Liquidation Feature:
Users can liquidate their collateral to repay IBN-USD debts. This is a self-directed process, protecting users from unexpected liquidations.
Safety and Limitations
Security Measures: IBNSCTrade prioritizes the safety of user deposits, undergoing multiple security audits and offering bug bounties to maintain high safety standards.
Deposit Limits: There are predefined limits on the amount of each collateral type that can be used within IBNSCTrade to mint IBN-USD, based on asset-specific risks.
Damage Control Parameters: The Alchemist incorporates parameters like Maximum Loss, Repay Cap, and Liquidate Cap to mitigate potential risks and damage.
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