💲Stablecoin CDP Documentation

Introduction:

Overview of ShezUSD:

ShezUSD is a decentralized stablecoin issued within the Shezmu Oasis platform. Users can mint ShezUSD by locking various approved collateral types into a Collateralized Debt Position (CDP). ShezUSD aims to provide a stable and secure medium of exchange and leverage opportunity within the DeFi ecosystem.

Purpose and Function:

The primary function of ShezUSD is to enable users to leverage their digital assets without selling them. It provides liquidity while maintaining exposure to asset appreciation and earning potential from staked or yield-generating assets.

How it Works:

Depositing Collateral:

To mint ShezUSD, users deposit supported collateral into a CDP. This collateral backs the ShezUSD issued and determines the maximum borrowing capacity based on the asset's risk parameters and the current loan-to-value (LTV) ratio.

Minting ShezUSD:

Once the collateral is deposited, users can mint ShezUSD up to their allowable credit limit. This process involves interacting with the Shezmu smart contracts, which calculate the available ShezUSD amount based on the collateral's current market value and the prescribed LTV ratio.

Interest Rates:

Interest rates on borrowed ShezUSD are dynamically adjusted based on system utilization and market conditions. The interest accrues to the debt over time, affecting the overall health of the CDP and the necessary maintenance to avoid liquidation.

Collateral Types Supported:

Accepted Collateral:

- Ethereum (ETH)

- Select ERC-20 tokens (e.g., wstETH, sfrxETH, USDC)

- NFTs from approved collections

Risk Parameters:

Each type of collateral has specific risk parameters that include LTV ratios, liquidation thresholds, and interest rates. These parameters are periodically reviewed and adjusted to reflect current market conditions and the asset's volatility.

Risk Management:

Liquidation Mechanisms:

If the value of the collateral falls below a certain threshold (liquidation ratio), the CDP is subject to liquidation. The collateral is sold to repay the borrowed ShezUSD, and a liquidation penalty is applied.

Stability Pool:

Users can participate in the stability pool by staking ShezUSD to cover potential under-collateralized loans. In return, they receive rewards from liquidation penalties and system fees.

Collateralization Ratios:

To safeguard the platform and users, minimum collateralization ratios are enforced. These ratios ensure that there is always sufficient collateral to cover the issued ShezUSD.

User Guide:

Creating a CDP:

1. Connect your wallet to the Shezmu Oasis interface.

2. Select the type of collateral you wish to deposit.

3. Enter the amount of collateral and confirm the transaction.

4. Mint ShezUSD based on the approved LTV ratio for your collateral.

Managing Your CDP:

- Monitor your collateral value regularly.

- Add more collateral or repay ShezUSD to maintain a healthy collateralization ratio.

- Take advantage of system features like auto-repay to manage risk automatically.

Smart Contracts:

Contract Addresses:

- ShezUSD Token: 0xd60eea80c83779a8a5bfcdac1f3323548e6bb62d

- Stability Pool: 0xAf299f58D53A961aaaA0AC48A0fdF60dCa07C06c

Key Functions:

- depositCollateral(address asset, uint amount)

- withdrawCollateral(address asset, uint amount)

- mintShezUSD(uint amount)

- repayShezUSD(uint amount)

Security:

Audits and Security Measures:

Shezmu Oasis undergoes regular security audits by leading blockchain security firms. Audit reports are publicly available to ensure transparency and trust.

User Fund Protection:

Advanced security protocols, including multi-sig wallets and timelocks, are employed to protect user funds and system integrity.

FAQ:

Q: What happens if I can't maintain the required LTV ratio?

A: If your CDP's LTV falls below the liquidation ratio due to a price decline in the collateral, your CDP will be liquidated to repay the debt.

Q: Can I use multiple types of collateral in one CDP?

A: Currently, each CDP supports one type of collateral.

However, you can open multiple CDPs with different collaterals.

Q: How are interest rates determined?

A: Interest rates are dynamically adjusted based on the overall system utilization and the specific risk profile of the collateral used.

Summation:

This documentation provides a comprehensive guide to using the ShezUSD CDP on the Shezmu Oasis platform, covering everything from basic operations to advanced features and security measures.