Boosted LUSD

bLUSD

bLUSD is a derivative token of LUSD that accrues an amplified yield beyond that of the Liquity Stability pool.

Risk Rating
Best
$1.22
1.38%
Summary
What we like
bLUSD is a derivative token that accrues and amplified yield beyond what is available to LUSD holders in the Stability Pool.
What we like less
In periods of high market volatility, there may not be enough LUSD reserves to cover all potential bLUSD redemptions.
What it means for you
bLUSD offers you a gamified way to earn a high yield on USD stablecoins by simply holding.
Information
Blockchain
  • Ethereum
Key Metrics
  • Market Cap: $4.5M
  • Fully Diluted Valluation: $4.5M
  • FDV / MC: 1
  • Ranking inside Exponential (among stables): #33
  • Circulating Supply: 3,666,448
  • Total Supply: 3,666,448
  • Volume (24H): $2.3K
  • ATH: $2.05 (07/27/2023)
  • ATL: $0.98 (03/10/2023)
Risk Assessment
Best
Asset Strength

bLUSD is a low-cap, fully collateralized asset. This asset is exposed to the underlying risks of Liquity and Chicken Bonds, which are protocols rated as Good and Average, respectively.

bLUSD is a stablecoin that trades within 100bps of its peg to USD, making it a somewhat volatile store of value.

Asset Tokenomics

bLUSD has an uncapped supply but has inflation control or burn mechanisms in place. A fraction of the entire LUSD supply is always deposited inside the stability pool. Liquity uses the stability pool as a liquidity reserve to help mitigate liquidity crises in case of black swan events impacting the price of ETH. This also serves as a price stability mechanism as LUSD depositors withdraw their stability deposits and sell in the open market.

Asset Volatility

bLUSD is a stablecoin that trades within 100bps of its peg to USD, making it a somewhat volatile store of value. A fraction of the entire LUSD supply is always deposited inside the stability pool. Liquity uses the stability pool as a liquidity reserve to help mitigate liquidity crises in case of black swan events impacting the price of ETH. This also serves as a price stability mechanism as LUSD depositors withdraw their stability deposits and sell in the open market.

Dependencies

Chicken Bonds


Liquity

Things to know about bLUSD

How is bLUSD created?

Users can create bLUSD by bonding their LUSD on Liquity. After bonding, a user receives a dynamic NFT that represent a claim on the deposited LUSD. At any time, users have two choices: either Chicken In or Chicken Out. Users who chicken in receive the accrued bLUSD and forfeit their initial LUSD deposit. Those who chicken out reclaim their initial LUSD deposit but forfeit their accrued bLUSD yield. Alternatively, users can go to the Curve bLUSD-LUSD3Crv pool to exchange their stablecoins for bLUSD.

What is bLUSD used for?

bLUSD is a derivative token that aims to earn an amplified yield above the LUSD Stability Pool and auto-compounds rewards. For Liquity, the token serves as a way for the protocol to accumulate its own liquidity, which it can then deploy to decentralized exchanges like Curve to manage LUSD's price around its peg to 1 USD.

What are the risks of bLUSD?

The risks of bLUSD include all the associated smart contract risks (Chicken Bonds, B.Protocol, Yearn, Curve, Convex), temporary withdrawal delays due to heavy liquidations, losses from liquidations (if ETH price declines significantly), and the bLUSD exchange rate (based on Curve). As yield falls on Curve due to fewer chicken ins, there is less incentive to bond or provide liquidity, which then leads to a cascading effect on the bLUSD price and yield.