Vault

What is dForce Vault?

The dForce Vault is tailored to enhance capital efficiency for our users by broadening the spectrum of collateral types accepted for USX. It introduces a new dimension of flexibility and accessibility, enabling USX minting against a wide range of isolated collateral assets, each with its own distinct risk profile. This approach allows users to maximize their borrowing power while maintaining stringent risk management protocols.

Vaults can be tailored to support various collaterals in isolation, including interest-bearing tokens (such as iTokens, aTokens, etc.), LP tokens, LSD assets (such as wstETH, rETH, etc.), DeFi staking tokens (such as veDF, etc.), and other long-tail tokens.

Each vault will implement different risk parameters based on the assessment results for the specific collateral asset supported, including:

• Interest (borrowing APY)

• Debt Cap (USX cap for the Vault)

• Supply Cap (cap on collateral)

• LTV (loan to collateral ratio)

• Liquidation Fee (liquidation discount on the collateral given to liquidators)

• Borrow Fee (upfront fee for each borrowing)

Compared with the Pool-based model, the Vault-based model better accommodates long-tail assets (e.g., LP tokens) with an isolated risk model (e.g., implementing debt and borrow caps simultaneously) serving as a safeguard. It also features a fixed interest rate, whereas the Pool-based model implements market-driven rates.

Below are some examples of dForce Vaults supported:

LP Token Vault

The LP Token Vault has been established to support LP tokens of USX-related pairs on several DEXes. This benefits both LPs and the protocol. LPs can achieve leverage of up to 20x over USX stablecoin pairs, enhancing capital efficiency. Additionally, increased liquidity will boost demand for USX in the open market and reduce liquidity subsidies for the protocol.

LP Token Vault was approved through DIP024.

Blockchain	DEX	LP Token	USX Cap	LTV	Interest	Upfront Fee	Liquidation Fee
Ethereum	Curve	USX/3CRV LP	10,000,000	92%	0.5%	0.01%	4%
Arbitrum	Curve	USX/2CRV LP	10,000,000	92%	0.5%	0.01%	4%

LSD Vault

The LSD Vault was introduced to improve capital efficiency for LSD holders, enabling them to maximize their DeFi gains alongside staking yields. The first of such Vaults is the wstETH Vault, where users can supply wstETH as collateral to mint USX and participate in other DeFi activities for higher returns.

The wstETH Vault was approved through DIP034 and saETH through DIP065.

Blockchain	LSD	Debt Ceiling	LTV	Interest	Upfront Fee	Liquidation Fee
Arbitrum	wstETH	3,000,000 USX	82.5%	16.0%	0.00%	4%
Arbitrum	saETH	4,000,000 USX	70.0%	16.0%	0.00%	5%
Optimism	wstETH	3,000,000 USX	82.5%	16.0%	0.00%	4%