A DAO-Managed, Interest-Bearing Basket of Low-Risk Stablecoins
bSTBL is a community-managed, interest-bearing basket of low-risk stablecoins designed to diversify risk and optimize yield across a selection of industry-leading, fully-backed stablecoins. The stablecoins and yield options used by bSTBL are selected by the community to ensure the lowest possible risk, with projects such as Aave and Compound being utilized to increase the capital efficiency of deposited tokens.
The primary objective of bSTBL is to provide exposure to a diversified basket of stablecoins with a focus on yield and decentralization. By spreading risk across multiple coins, bSTBL mitigates the impact of issues faced by individual tokens. As the basket does not automatically rebalance with price changes, one stablecoin losing its peg will not affect the other tokens in the basket. By using decentralized stablecoins, bSTBL reduces exposure to regulatory risk and reliance on central issuers.
bSTBL starts with a mixture of centrally issued and decentralized stablecoins, depositing them into various protocols to earn yield. The strategies are swapped regularly to maximize the yield earned. Rebalancing occurs when the community believes the underlying tokens used are no longer the best available options or when weightings have changed for other reasons.
The basket is maintained quarterly in two phases:
During the last two weeks of the quarter, the determination phase takes place. In this phase, changes needed for the next reconstitution are determined. Strategies and allocation percentages are revisited to strike a balance between decentralization and optimal, secure yield for the stablecoins. Proposed changes are published on the governance forum for one week, followed by a governance vote for the community to approve the changes.
In the two weeks following a successful vote, the basket components are adjusted according to the instructions published during the determination phase.
Multisig holders are authorized by the community to rebalance baskets outside the usual schedule during critical emergencies. This clause allows for quick rebalancing in the event of a protocol or basket being in danger of failing.
For a project to be included in the bSTBL basket, it must meet the following criteria:
- Be a stable token project available on the Ethereum blockchain.
- Be in liquid markets and used in various lending protocols.
- The protocol must have been operational for at least six months.
- In the event of a safety incident, the team must have addressed the problem responsibly and promptly, providing a reliable solution and a transparent, detailed breakdown of the incident.
- Must be sufficiently decentralized and/or collateralized.
- 1.Diversification: Spreading risk over multiple stablecoins reduces the impact of problems faced by individual tokens.
- 2.Decentralization: Using decentralized stablecoins reduces exposure to regulatory risk and reliance on central issuers.
- 3.Yield Optimization: The underlying tokens utilize strategies that maximize yield for basket holders without requiring any action on their part.
- 4.Community Management: The basket is maintained by the community, ensuring that decisions are made in the best interest of all stakeholders.
bSTBL is an innovative solution for users seeking exposure to a diversified basket of low-risk stablecoins with a focus on yield and decentralization. Managed by the community, bSTBL reduces risk, optimizes yield, and supports decentralization in the DeFi ecosystem.