Enosys Loans CDPPrice

(CDP)

The CDP Dollar is the native stablecoin of the Enosys Loans protocol on the Flare Network. To mint it, users must open a 'Trove' by depositing collateral. Currently, the protocol supports FXRP (bridged XRP) and wFLR (Wrapped Flare). Users must ensure they meet the minimum debt requirement to maintain system stability and cover the necessary liquidation reserves. For XRP holders, assets must first be wrapped into FXRP via the FAsset system or a bridge before they can be utilized as collateral.

Liquidation and redemption serve different purposes. Liquidation occurs when a user's collateral ratio falls too low, often due to market volatility; the collateral is then used to pay off the debt. Redemption is a stability mechanism used to maintain the stablecoin peg. If the CDP Dollar trades below its target price, anyone can redeem it for collateral from the system. Importantly, the system sources this collateral from the loans with the lowest interest rates first, regardless of their collateral ratio.

Enosys Loans features a unique mechanism where users can choose their own APR. While a lower rate reduces borrowing costs, it increases 'Redemption Risk.' Because the protocol sources collateral for redemptions from loans with the lowest interest rates first, setting a higher rate acts as a defensive measure. It moves the user's Trove further back in the queue, protecting it from being closed by the system's peg-maintenance operations.

Users can generate yield by depositing their minted CDP Dollars into the Stability Pool. This pool provides 'real yield' derived from protocol activities, including minting fees and interest payments. Additionally, participants receive 'Liquidation Rewards,' which are portions of discounted collateral from liquidated Troves. Early participants may also be eligible for extra incentives, such as APS governance tokens and rFLR rewards.

The protocol currently supports FXRP and wFLR as collateral assets. The roadmap includes plans to expand this list to include stXRP (staked XRP) and FBTC (bridged Bitcoin). These additions will allow users to maintain exposure to their underlying assets and potentially earn staking rewards while simultaneously using those assets as collateral to mint stablecoins and access liquidity.

Each token plays a specific role. CDP is the stablecoin and the primary product used for borrowing. APS (Apsis) is the primary governance token, which users can earn as a reward for participating in the Stability Pool or providing liquidity on decentralized exchanges. HLN (Helion) serves as a secondary governance token; holding it can provide users with various benefits, such as reward multipliers or reductions in protocol fees.