Lybra

Lending

Lybra is a decentralized stablecoin issuer developing the next generation of Liquid Staking Derivative (LSD)-based stablecoins.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Lybra is a decentralized protocol that aims to provide a stable and interest-bearing stablecoin called eUSD, which is backed by ETH and stETH. eUSD holders can earn a stable income by simply holding the stablecoin.
What we like less
Lybra is still a relatively new project that may face technical challenges in the future. eUSD is also currently only available on Ethereum, meaning users have to deal with high gas fees.
What it means for you
Allows you to mint eUSD by depositing your ETH or stETH as collateral, and then use eUSD to participate in the DeFi ecosystem. You can also benefit from the stable income generated by eUSD, which can help counteract inflation.

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Information
Exploit/Hacks
None
Info
Key Metrics
  • TVL: $4.3M (Rank #171)
  • TVL Ranking by Lending: #0
  • Blockchain: Ethereum
  • Chain TVL
    • Ethereum: $4.29M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code not reviewed by any experienced auditors
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Latest protocol version launched in 2023; maturity over nine months reduces technical risk as smart contracts are sufficiently battle-tested
  • Top 5% by total value locked reduces risk
  • Core contracts require on-chain voting for parameter updates
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • Robust controls to mitigate oracle price manipulation
  • Cross-collateral markets are exposed to systemic risks as each asset creates incremental risks for the platform as a whole
  • Solid controls in place to prevent risky borrowing
  • Solid mechanisms in place to ensure healthy liquidations
  • Solid methods to accrue protocol reserves
Things to know about Lybra

How Lybra works

Lybra works by allowing users to deposit ETH or stETH into the protocol and use them as collateral to mint eUSD, a stablecoin pegged to USD. The minimum collateral rate (MCR), or the lowest ratio of loan to collateral that will not trigger a liquidation (under normal mode) is 150%; user should strive to maintain at least a healthy ratio of 160% collateralization. The deposited ETH or stETH are then used to generate income through liquid staking derivatives (LSD), which are tokens that represent the staked assets and their staking rewards. The income from LSDs is then converted to eUSD and distributed to eUSD holders as a stable interest rate. Users can also redeem eUSD for ETH or stETH at any time by paying back their debt.

How Lybra makes money

Lybra makes money by charging an annual service fee of 1.5% of the total amount of eUSD in circulation. Minting and redemption of eUSD are free of charge. The service fee accrues every second based on the current eUSD circulation and is allocated to the LBR staking pool (esLBR). esLBR (escrowed LBR) has the same value as LBR with the same total supply of LBR. esLBR cannot be traded or transferred but has voting rights and can share in protocol earnings.

How you make money on Lybra

You can mint and hold eUSD, which will earn you a stable interest rate of about 8% APY. You can also make money by buying and holding LBR tokens, which will give you a share of the protocol fees and rewards, as well as voting rights on the protocol governance. Additionally, you can provide liquidity to the LBR/ETH or eUSD/USDC pools on decentralized exchanges, which will earn you trading fees and liquidity mining rewards. Lastly, you can become a liquidator or liquidation keeper to earn ETH.

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