Empowering crypto asset holders to leverage their existing collateral, Vaults offers a new method to generate liquidity without losing their position in the underlying asset. Dean Tribble, CEO of Agoric OpCo, said, “Vaults offer an alternative means to mint stable tokens, setting decentralized tokens apart from their fiat-backed equivalents. A fully functioning Vault system allows crypto collateral holders to leverage their assets and fulfill their demand for IST, which in turn contributes to the Agoric economy through fees.”
The ATOM deposited is held as collateral for the IST, and can be reclaimed at any time by remitting the minted IST. Vault holders may also adjust their vaults at any time, subject to collateral requirements, to deposit or withdraw collateral and mint or repay IST.
Vaults utilizes a community-elected Economic Committee which contributes to IST’s price stability by carefully monitoring minting limits, stability fees, and collateralization ratios. During more extreme market volatility, committee members have the ability to make rapid changes to specific parameters, thus ensuring that IST maintains parity with the U.S. dollar.
Zaki Manian, Director of the Decentralized Cooperation Foundation (DCF), said: “Vaults introduces a handful of new components to Inter Protocol that continue to improve the scalability of IST. The liquidation system and price oracle build on the foundations established with the Economic Committee and PSM operations.”
Vaults follows closely on Inter Protocol’s debut application, the Parity Stability Module (PSM), which enables users to mint IST in exchange for approved stablecoins such as USDC, USDT, and DAI, at a 1-to-1 ratio.