Top 3 CDP Protocols
Collateralized Debt Position (CDP) protocols mint their own stablecoins using collateral. The top 3 CDP protocols by TVL are MakerDAO (MKR), JustStables (USDJ), and Liquity (LQTY).
Collateralized Debt Position (CDP) protocols mint their own stablecoins using collateral.
The top 3 CDP protocols by TVL are MakerDAO (MKR), JustStables (USDJ), and Liquity (LQTY).
1. MakerDAO (MKR)
MakerDAO is a decentralized organization while Maker Protocol is a software platform that allows users to issue and manage the DAI stablecoin.
Maker (MKR) is the governance token of the MakerDAO and Maker Protocol.
Maker Protocol enables over-collateralized loans by locking ETH in a smart contract and minting Dai, a USD-pegged stablecoin. Dai can be traded and used for payments.
MKR is minted & burnt depending on the debt status of MakerDAO. If the financial resources of the protocol cannot cover its debt, new tokens are minted. If there is a surplus, tokens are burned.
To vote on proposals users need to own MKR, or have it delegated to themselves. Then they can create a voting contract and lock MKR tokens in it.
Website: https://makerdao.com/en
Token Terminal: https://tokenterminal.com/terminal/projects/makerdao
DeFiLlama: https://defillama.com/protocol/makerdao
CoinMarketCap: https://coinmarketcap.com/currencies/maker/
2. JustStables (USDJ)
The USDJ stablecoin system creates USDJ in exchange for collateral, such as TRON (TRX), which is held in escrow till the borrowed USDJ is repaid. USDJ is a multi-collateral stablecoin whose value is pegged to the US dollar.
The JustStable CDP, a core component of this system, is a smart contract running on the TRON blockchain.
JustStable CDPs create USDJ when new assets are leveraged and destroy USDJ when it is repaid. The amount of collateral in a CDP is higher than the amount of the debt - at least 150%.
JUST (JST) tokens have multiple functions in the ecosystem:
paying interest,
maintaining the platform,
governance,
setting parameters like interest rates & minimum collateralization ratio.
Check out the step-by-step instructions on how to generate USDJ on JustStable CDP.
Website: https://juststable.tronscan.org
Token Terminal: NA
DeFiLlama: https://defillama.com/protocol/juststables
CoinMarketCap: https://coinmarketcap.com/currencies/just/
3. Liquity (LQTY)
Liquity enables 0% interest loans against collateral of Ether (ETH). The loans are given in LUSD, a USD-pegged stablecoin, with a collateral ratio of 110%.
The loans are additionally secured by an LUSD Stability Pool by all the borrowers collectively acting as guarantors of last resort.
Liquity has no governance fee as all the operations are algorithmic and completely automated.
Investors can generate revenue in 2 ways:
1. By depositing LUSD in the Stability Pool and earning liquidation gains & LQTY rewards.
2. By staking LQTY and earning issuance fees in LUSD and redemption fees in ETH.
Website: https://www.liquity.org
Token Terminal: https://tokenterminal.com/terminal/projects/liquity
DeFiLlama: https://defillama.com/protocol/liquity
CoinMarketCap: https://coinmarketcap.com/currencies/liquity