Introduction
Welcome to the documentation for StableHODL, a powerful algorithm designed to autonomously manage your loan conditions within the Zero Protocol ecosystem. This guide aims to provide you with a comprehensive understanding of how StableHODL works, how to use its web interface to manage your loan, and the key concepts that underpin its functionality.
What is StableHODL?
StableHODL is not just a tool; it's an algorithm that operates based on the state of your Zero loan and your balance in the stability pool. It calculates the desired updated loan and pool conditions, providing you with actionable steps to adjust your loans accordingly. While the algorithm itself is blockchain-agnostic, the web interface serves as your gateway to manage your loan effectively within the Zero Protocol. Learn more about Zero Protocol
Why Use StableHODL?
Navigating the world of decentralized finance (DeFi) can be complex. StableHODL simplifies this by automating the management of your loan conditions. It aims to maximize your returns while minimizing risks, such as liquidation. The algorithm operates in a way that cares about the state of your loan, ensuring that you are always in the best possible financial position.
Key Concepts
- Zero Protocol: The foundational protocol enabling bitcoin-backed loans.
- StableHODL Algorithm: The core algorithm that manages your loan conditions based on your Zero loan and stability pool balance.
- DLLR (See below): The Sovryn Dollar stablecoin, pivotal in all Sovryn trades. Learn more about DLLR
- Zero Loan: Your loan within the Zero Protocol, which StableHODL's algorithm actively manages.
- Stability Pool and Liquidation: A pool that burns its stablecoins to obtain liquidated user's loan collateral, maintaining the protocol's steady state. Learn more about the Stability Pool
- Collateral Ratio (CR): A metric indicating how close you are to paying back your loan relative to your deposited collateral.
- Reserve Ratio: A ratio between your reserves in the stability pool and your open loan, indicating the health of your reserve balance.
Why is DLLR not a shitcoin?
This section is for the bitcoin maximalists, those who view any blockchain token besides BTC as a "shitcoin." Here, we'll explore the reasons why DLLR stands apart from the typical cryptocurrencies and why it's a valuable addition to the ecosystem.
The Need for Stablecoins in the Bitcoin Era
Bitcoin, as the pioneer cryptocurrency (there is no second best), has garnered significant attention and adoption over the years. However, one inherent characteristic of Bitcoin is its price volatility. While this volatility can present opportunities for traders and investors, it can also be a hindrance for those looking for less volatility in their digital assets.
Stablecoins emerge as a solution to this issue. They bridge the gap between the volatile world of bitcoin value capture and the stable world of fiat currencies. Stablecoins aim to provide the best of both worlds – the security, transparency, and borderless nature of cryptocurrencies combined with the (short-term) stability of traditional fiat currencies.
Sound Money Based on the Bitcoin Standard
What sets DLLR apart from many other stablecoins is its foundation on the Bitcoin standard, not the fiat standard. While most stablecoins are pegged to fiat currencies like the US Dollar, Euro, or others, DLLR's value is intrinsically tied to the underlying assets and principles of the Bitcoin ecosystem.
This means that DLLR is designed to be a form of "stable" money that adheres to the principles of sound money, just like Bitcoin itself. It maintains its value over time, is resistant to inflationary pressures, and is backed by tangible assets, primarily Bitcoin.
By aligning with the Bitcoin standard, DLLR offers a bridge between the world of fiat currencies and the principles of sound money upheld by Bitcoin maximalists. It provides a reliable store of value in an era of Bitcoin's price volatility, allowing users to experience the benefits of cryptocurrency without the uncertainty of price fluctuations.
In essence, DLLR represents a valuable addition to the ecosystem for those who seek stability and value preservation, all while staying true to the principles of Bitcoin and sound money.
Conclusion
By the end of this documentation, you'll have a solid understanding of these concepts and how to use StableHODL to your advantage.