Chi Protocol

An introduction to Chi Protocol, Scalable Stablecoins and Our Mission

Chi is an Ethereum-based protocol issuing a decentralized and capital-efficient stablecoin, known as USC, designed to bring stability, scalability and sustainable economic incentives to the world of decentralized finance. USC is the first stablecoin issued by Chi Protocol. LSTs are used as collateral to back it, and it relies on a dual stability mechanism to maintain the price at $1

Revolutionizing the World of Decentralized Stablecoins: An Introduction to USC and CHI

Chi’s primary goal is to scale DeFi with a capital-efficient and yield-generating stablecoin known as USC. This is achieved by always enabling users to mint USC with their LSTs/ETH deposits at a 100% collateral ratio and combining this with the dual stability mechanism to generate a stablecoin yield source for USC stakers.

An additional important component of Chi Protocol is the CHI governance token, which can be staked to receive the LST yield of the stablecoin reserves. Alternatively, users can lock CHI for a customizable period and have allocated a respective veCHI amount that is used to participate in the governance decisions of the protocol. Moreover, veCHI lockers are entitled to CHI incentives and can earn boosted ETH staking rewards.

USC, a fully backed asset, offers users much-needed stability in the volatile cryptocurrency market while benefiting from its stable yield component. Meanwhile, CHI allows users to earn native ETH interest and gain from the demand of USC.

Aligning Interests of Protocol’s Stakeholders: Innovating Yield Distribution Mechanism of Decentralized Stablecoins

One unique aspect of Chi Protocol is its opportunity for users to generate a steady income through real yield. Users can earn additional USC from the dual stability mechanism by staking USC. This income is drawn from the case where the stablecoin trades below 1 USD, and the reserves to back it are in excess. In this scenario, the algorithm buys back USC and distributes it to USC stakers. Furthermore, stUSC earns stCHI incentives that automatically earn ETH staking yield.

By depositing ETH or LSTs into the protocol’s reserves, users can mint USC against them. The yield generated from the Liquid Staking Token is distributed to CHI stakers, giving CHI an intrinsic value with a natural source of income paid in ETH.

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