In this Radiant Capital Twitter Spaces, Mikey, and Vestator from Vesta Finance join Issac and Hung Vu From Radiant Capital to talk about $VST being added to the Radiant platform and more!
Read our notes below to learn more.
Mikey’s Intro
Co-founder of Vesta Finance, a collateralized stablecoin protocol.
Previously worked on a UI layer project with Zapper for a year and a half.
Interest in stablecoins led to the launch of Vesta.
The experience has been amazing, have made great connections with other builders in the space.
Vestator’s Intro
Still a student.
Joined Vesta Finance team as the marketing lead.
What is Radiant?
Radiant Capital is an omnichain money market that allows users to deposit and borrow a variety of supported assets across multiple chains without using bridges.
Radiant v2, the upcoming version launching in mid-February, aims to be the DeFi protocol with the lowest price-to-fee ratio in the crypto space.
Users can earn real yields in stablecoins by locking Radiant liquidity tokens and receiving a share of protocol revenue.
Additionally, unlocking Radiant liquidity also activates the ability to earn $RDNT tokens, which are used for borrowing and lending within the money market and provide voting rights for the future direction of the protocol.
What is Vesta?
Vesta is a CDP protocol that allows users to collateralize assets for stablecoin minting.
The long-term vision of the project is to become a DeFi powerhouse by offering various financial products.
In the initial months, the project saw significant interest in leveraged GLP.
In the future, Vesta aims to explore perpetual and other leveraged products.
The focus of the project is to drive innovation in the DeFi space through research and development.
What is the Process for Vesta to Support a New Asset as Collateral?
Vesta follows a collateral risk framework to onboard new collateral.
This framework consists of 7 steps, starting with a post on the governance forum and ending with a quantitative risk score.
During the collateral onboarding process, the protocol analyzes metrics such as liquidity depth and centralization risk, while ongoing monitoring looks at market data like volume and volatility.
If a metric gets out of balance, the parameters may be adjusted.
The protocol has also introduced a Minting Cap to manage the exposure of the stablecoin to a single asset.
What will be the benefits for the $RDNT holders to add $VST on the Radiant Platform?
$VST is a stable coin with a soft peg, meaning its value can fluctuate slightly, but not greatly, around a certain value.
It is collateralized by assets and the protocol is over-collateralized, making it less likely to experience a significant devaluation.
Lending protocols provide exposure to certain assets or the ability to magnify exposure to an asset, such as $GLP in this case.
The dynamic between loan demand and loan supply creates opportunities for speculating on the value of $VST.
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Risk Scope
The risk implications of using Vesta as collateral are being approached conservatively with low minimum caps on the collateral.
The stability of the stablecoin and the security of the Vesta collateral are of utmost importance in the risk management strategy.
The cross-collateral model in Radiant presents a concern, so it's suggested to implement a borrowing power cap based on Vesta's current liquidity, which can be scaled as liquidity increases.
This cap will limit the potential impact of any black swan events or market manipulations on other assets.
Strategies using Radiant x Vesta
The potential use case for listing the $VST token is to expose Radiant users to assets that are of the more interesting origin or collaterals that are supported by Vesta.
By using $GLP to mint $VST, users can keep their exposure to $GLP while borrowing against the $VST which is a stable collateral.
This opens up more collateral options for Radiant users, as they are currently only open to a limited number of options.
By opening up to the assets offered by Vesta, Radiant users can have more exposure to the different collateral types.
Vesta’s Growth Plans
The upcoming saving module for Vesta and a lending protocol will align the LP incentives with users of the protocol.
Vesta is currently focusing on becoming an innovation center, building new products, and growing the ecosystem.
The saving module will give feedback to ecosystem stakeholders and help strengthen the peg of the $VST stablecoin.
Proposes a borrowing power cap of 2 million in the short term, but as they scale liquidity, it will grow to 20 million, 50 million, and eventually 100 million.
What’s Next for Vesta
Vesta is focused on becoming an innovation center and creating new, innovative products and features that are driven by new technologies.
Some of the initiatives in the pipeline include the saving module, staking module, and spot leverage engine.
The aim is to scale $VST liquidity and make it a valuable asset for the ecosystem stakeholders.
Vesta's roadmap is focused on creating products and features that the community will enjoy using.
Check Out These Important Links
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Our easy-to-use platform enables simple exposure to multiple Curve, Convex and Frax.Convex pools, giving you access to complex strategies normally out of reach.
Earn a guaranteed rate in underlying assets in our fixed-rate pools or supercharge your yields by 25%+ in our BOOST pools - without increasing capital risk!
Find out more at App.alluo.finance