Analysis of Stable++: The First Stablecoin Protocol of RGB++Layer Adopts CDP Mechanism

In the DeFi ecosystem, the stablecoin system is a key component that directly influences the overall landscape of the ecosystem. For the emerging BTCFi, a secure and reliable stablecoin protocol is especially important. This article will provide an in-depth interpretation of the stablecoin protocol Stable++ within the RGB++ Layer ecosystem.

Stable++ adopts the CDP model, allowing users to over-collateralize BTC or CKB to mint the RUSD stablecoin. This protocol combines the Stability Pool insurance pool and bad debt redistribution mechanism, aiming to provide a reliable stablecoin minting scenario for BTC and CKB holders. At the same time, leveraging CKB's unique issuance method, Stable++ is expected to build a damped system in the RGB++ ecosystem, acting as a buffer during severe market fluctuations.

The Main Functions and Mechanism Design of Stable++

The core features of Stable++ include:

1. Users can over-collateralize BTC or CKB to borrow RUSD stablecoin, and can use RUSD to redeem the collateral.

2. Users can stake RUSD back to Stable++ to receive governance token STB as a reward and gain the right to participate in asset liquidation.

3. RUSD supports isomorphic binding and Leap functionality, enabling asset transfers between different public chains.

4. NervosDAO users can stake CKB to Stable++ in exchange for wstCKB, achieving asset liquidity.

The Rationality and Efficiency of the Settlement Mechanism

Stable++ has innovated in the design of the clearing mechanism by adopting a dual insurance mechanism of "Stability Pool" and "Redistribution" to improve clearing efficiency:

1. The Stability Pool acts as a "standing army", ready to liquidate bad positions at any time. During liquidation, the RUSD in the insurance pool will be directly destroyed, and LPs will receive the collateral of the liquidated positions as a reward.

2. When the Stability Pool funds are insufficient, the Redistribution mechanism will be activated to proportionally redistribute the debts and collateral of the liquidated positions among all positions.

This dual insurance mechanism ensures that liquidation events can be processed quickly, effectively addressing the bad debt issues in traditional lending protocols, while allowing for borrowing at a lower collateral rate, thus improving capital utilization.

The Potential of Building Under-Damped Systems

Stable++ combined with the issuance mechanism of CKB is expected to form a healthy underdamped system:

1. When the price of CKB rises, more people will use CKB to collateralize and mint RUSD, indirectly reducing the inflation rate of CKB.

2. The minting of RUSD increases on-chain DeFi activity, allowing miners to earn more rewards.

3. In conjunction with CKB LST, further enhance composability and liquidity.

This mechanism can create an effective buffering effect in the CKB ecosystem, rather than simply leveraging.

Market Demand and Development Prospects

From a market perspective, the BTCFi ecosystem does need a large-scale decentralized stablecoin:

1. The currently dominant USDT and USDC in the market have centralized risks, while decentralized stablecoins can meet the security needs of large holders.

2. The current total market value of stablecoins is only a fraction of Bitcoin's market value, and there is still significant room for growth for BTC-based stablecoins.

With the development of the RGB++ Layer ecosystem and the improvement of related infrastructure, projects like Stable++ will bring new possibilities to BTCFi, and the CKB ecosystem is expected to become a fertile ground for innovation and entrepreneurship.