---
title: "Stabilis"
path: "/ecosystem/stabilis"
bannerImage: "https://j9ytchrzkvqpcul7.public.blob.vercel-storage.com/710fd694-562b-4fe1-bbe1-7c5010f2c436.avif"
version: "2.0.0"
author: "ShardSpace Admin"
createdAt: "2026-02-06T16:07:57.193Z"
updatedAt: "2026-03-28T15:22:59.211Z"
---

# Stabilis

[Stabilis](https://docs.ilikeitstable.com/introduction/protocol-overview) is a decentralized financial ecosystem built on the [Radix DLT](https://www.radixdlt.com/) platform, comprising two main components: the ILIS DAO and the STAB Protocol. The ecosystem aims to create stability within the Radix DeFi landscape through algorithmic mechanisms and community governance.

## Overview

The Stabilis ecosystem was developed to address the need for stable assets within the Radix DLT network. At its core, [the system consists of two main components](https://docs.ilikeitstable.com/introduction/protocol-overview): the ILIS DAO (I Like It Stable DAO) and the STAB Protocol. The ILIS DAO serves as the governing entity, while the STAB Protocol provides the technical infrastructure for maintaining a stable asset called $STAB.

### ILIS DAO

[The ILIS DAO is incorporated as a non-profit Decentralized Autonomous Organization](https://docs.ilikeitstable.com/introduction/protocol-overview/ilis-dao) in the Marshall Islands under the legal name "I Like It Stable DAO LLC." The organization operates under the Marshall Islands DAO Act and is structured to ensure transparent, community-driven governance of the Stabilis ecosystem. The DAO's primary mission is to build, manage, and support open-source software for digital stable assets on the Radix DLT platform.

### STAB Protocol

[The STAB Protocol represents the first protocol governed by the ILIS DAO](https://docs.ilikeitstable.com/introduction/protocol-overview/stab-protocol), designed to provide a stable asset ($STAB) for the Radix ecosystem. Unlike traditional stablecoins that maintain a rigid peg to fiat currencies, STAB employs a unique interest rate mechanism that allows for dynamic price adjustment based on market conditions. This approach aims to achieve what the protocol terms "fair-priced stability."

### Development History

[The Stabilis ecosystem was founded by a developer known as Octopus](https://docs.ilikeitstable.com/ilis-dao/founders), who has a background in Physics and an interest in complex systems. The project began as a personal endeavor to explore the possibilities of the Radix platform and its Scrypto programming language, eventually evolving into a full-fledged ecosystem. The founder emphasizes a meritocratic approach to development, focusing on practical results over individual recognition.

The ecosystem officially launched with the [incorporation of the ILIS DAO on August 22, 2024](https://docs.ilikeitstable.com/introduction/protocol-overview), marking a significant milestone in the development of decentralized financial infrastructure on the Radix network.

### Technical Infrastructure

The Stabilis ecosystem leverages several innovative technical features to achieve its goals. [The STAB Protocol utilizes a collateralized debt position (CDP) model](https://docs.ilikeitstable.com/introduction/protocol-overview/stab-protocol) where users can borrow $STAB tokens by providing collateral. The system maintains stability through a combination of:

- A dynamic interest rate mechanism that adjusts based on market supply and demand.

- A minimum collateralization ratio (MCR) of 150%.

- Liquidation mechanisms to ensure system solvency.

- Flash loan capabilities for advanced DeFi operations.

The ecosystem's smart contracts are implemented using Radix's Scrypto programming language, with key components including the [Stabilis Proxy Component](https://docs.ilikeitstable.com/stab-protocol/technical-info/components-and-manifests) for advanced operations and various resource-oriented tokens for governance and liquidity provision.

## ILIS DAO

### Organization

The ILIS DAO operates as a non-profit limited liability company incorporated in the Marshall Islands. [The organization's primary purpose, as stated in its Operating Agreement, is to "build, manage, and support open-source software in the field of digital stable assets for the Radix DLT, with the goal of fostering transparent, fair, and accountable systems that promote community-driven initiatives and societal benefits, without the aim of profit generation."](https://docs.ilikeitstable.com/introduction/protocol-overview/ilis-dao)

The DAO's legal structure is governed by multiple Marshall Islands laws, including the Limited Liability Company Act of 1996, the Non-Profit Entities (Amendment) Act of 2021, the Business Corporations Act, and the Decentralized Autonomous Organization Act of 2022. This legal framework provides the organization with a fit-for-purpose regime designed to protect members while supporting innovation in the blockchain space.

[Under its non-profit status](https://docs.ilikeitstable.com/introduction/protocol-overview), the DAO is restricted from:

- Allowing net earnings to benefit any individual.

- Exclusively engaging in legislative influence.

- Participating in political campaigns.

- Operating primarily as a for-profit business.

### Governance Structure

The ILIS DAO employs a token-based governance system where [decisions are made and executed on-chain whenever possible](https://docs.ilikeitstable.com/introduction/protocol-overview/ilis-dao). [The governance process involves members voting on proposals through a dedicated Voting Smart Contract](https://docs.ilikeitstable.com/ilis-dao/using-ilis-dao/governance), with voting power determined by the number of ILIS tokens held in a member's staking position.

### Membership System

[Membership in the ILIS DAO is obtained through the acquisition and staking of ILIS tokens](https://docs.ilikeitstable.com/ilis-dao/using-ilis-dao/membership). The membership system includes several key features:

- Members must create a Membership ID.

- ILIS tokens can be staked to the Membership ID.

- Staked tokens provide voting rights and staking rewards.

- Members can optionally lock their tokens for extended periods to receive additional rewards.

- A 7-day unstaking period applies when members wish to withdraw their tokens.

### Proposal System

[The DAO's governance operates through a proposal system where members can submit and vote on various initiatives](https://docs.ilikeitstable.com/ilis-dao/using-ilis-dao/governance). Each proposal includes:

- A title and description.

- Detailed specifications.

- Attachments with additional information.

- A voting deadline.

- A quorum requirement.

Once a member votes on a proposal, their staked tokens are locked until the voting period ends, preventing double voting and ensuring governance integrity.

### Token Distribution and Economics

The ILIS DAO utilizes a [Liquidity Bootstrapping Pool (LBP) mechanism](https://docs.ilikeitstable.com/ilis-dao/technical-info/liquidity-bootstrapping-pools) for its initial token distribution. This approach aims to achieve both fair distribution and sufficient liquidity for the $ILIS token. The LBP works by:

- Starting with an intentionally high token price that gradually decreases.

- Discouraging early token accumulation by major buyers.

- Creating a "fair pricing game" where participants attempt to time their purchases optimally.

- Automatically adjusting token weights over time to influence price dynamics.

### Incentive Structure

[The DAO maintains an incentive system to reward actions that benefit the Stabilis ecosystem](https://docs.ilikeitstable.com/ilis-dao/using-ilis-dao/incentives). Key features of the incentive system include:

- Weekly ILIS token rewards for specific beneficial actions.

- Staking requirements for receiving rewards.

- Optional token locking for enhanced rewards.

- Manual claiming of rewards within a 5-week window.

- Incentivized resources, such as $LPSTAB tokens for liquidity provision.

### Technical Implementation

The DAO's technical infrastructure is built on the Radix DLT platform and includes several key smart contracts:

- [A Voting Token Smart Contract for membership management](https://docs.ilikeitstable.com/ilis-dao/using-ilis-dao/membership).

- [A Voting Smart Contract for proposal processing](https://docs.ilikeitstable.com/ilis-dao/using-ilis-dao/governance).

- [Incentive management components for reward distribution](https://docs.ilikeitstable.com/ilis-dao/using-ilis-dao/incentives).

The DAO maintains its [official online presence at ilikeitstable.com](https://docs.ilikeitstable.com/introduction/protocol-overview), where members can access governance features, documentation, and participate in DAO activities.

## STAB Protocol

### Overview

The STAB Protocol is the first protocol developed under the governance of the ILIS DAO, designed to provide a stable asset ($STAB) for the Radix DLT ecosystem. [Unlike traditional stablecoins, STAB employs a dynamic interest rate mechanism that allows its value to fluctuate within controlled parameters](https://docs.ilikeitstable.com/introduction/protocol-overview/stab-protocol), aiming to achieve what the protocol terms "fair-priced stability."

### Technical Architecture

### Loan System

[The STAB Protocol utilizes a collateralized borrowing system similar to other decentralized stablecoin protocols](https://docs.ilikeitstable.com/stab-protocol/using-stab-protocol/borrow). Users can create $STAB by providing collateral and opening a loan position. The system maintains several key parameters:

- A Minimum Collateralization Ratio (MCR) of 150% for all collateral types.

- [A total liquidation penalty of 15%, with 10% going to liquidators and 5% to the protocol](https://docs.ilikeitstable.com/stab-protocol/technical-info/system-parameters).

- Currently, only XRD (the native token of Radix) is accepted as collateral.

[Loan management features](https://docs.ilikeitstable.com/stab-protocol/using-stab-protocol/manage-loans) allow users to:

- Add or remove collateral from existing loans.

- Borrow additional $STAB against existing collateral.

- Partially or fully repay outstanding loans.

- Monitor loan health and collateralization ratios.

### Stability Mechanisms

The STAB Protocol employs several mechanisms to maintain price stability:

1. $1

[The protocol uses a dynamic interest rate system](https://docs.ilikeitstable.com/stab-protocol/technical-info/interest-rate) that influences $STAB's internal price. The interest rate:

- Can range from -33.33% to +50% annually.

- Adjusts based on market supply and demand.

- Influences borrowing and holding incentives.

- Uses a PID controller for precise adjustments.

[The interest rate calculation](https://docs.ilikeitstable.com/stab-protocol/technical-info/interest-rate) follows the formula:

```
interest_rate -= (kp * (price_error / internal_price) + ki * (average_of_last_50_prices / internal_price))) * passed_minutes

```

where `kp` and `ki` are controller constants, and `price_error` is the difference between market price and internal price.

1. $1

[The protocol includes a two-step liquidation process](https://docs.ilikeitstable.com/stab-protocol/using-stab-protocol/liquidations) to maintain system solvency:

- Marking Phase: Liquidators first mark unhealthy loans for liquidation.

- Execution Phase: After a 5-minute delay, the marker can liquidate the loan.

- Public Liquidation: If the marker doesn't act within 10 minutes, any user can liquidate the marked loan.

1. $1

[The protocol includes redemptions and forced minting mechanisms](https://docs.ilikeitstable.com/stab-protocol/technical-info/components-and-manifests) that provide additional stability tools:

- Redemptions allow for forced liquidation of the lowest-collateralized loans.

- Forced minting enables additional $STAB creation from highly-collateralized loans.

- Flash loans are available for advanced trading strategies.

### Liquidity System

[The protocol maintains a dedicated XRD/STAB liquidity pool](https://docs.ilikeitstable.com/stab-protocol/using-stab-protocol/swap) where users can:

- Swap between $XRD and $STAB tokens.

- Provide liquidity and receive $LPSTAB tokens.

- Monitor real-time trading metrics and pool statistics.

[The system calculates a Real 7-day APY](https://docs.ilikeitstable.com/stab-protocol/technical-info/real-7d-apy) for liquidity providers using the formula:

```
7_day_real_apy = ((lp_valuation_now / lp_valuation_7_days_ago)^(365 / 7) - 1) * 100

```

This calculation uses current asset prices for both time periods to provide a fair comparison between holding assets and providing liquidity.

### Risk Factors

[The STAB Protocol documentation identifies several key risks](https://docs.ilikeitstable.com/stab-protocol/dangers):

1. $1

2. $1

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These risks are actively monitored and managed through the protocol's governance mechanisms and technical features.

## Technology

### Core Components

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### Resource Tokens

The ecosystem utilizes several resource-oriented tokens:

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### Technical Features

### Automated Market Maker (AMM)

[The protocol includes a built-in AMM](https://docs.ilikeitstable.com/introduction/protocol-overview/stab-protocol) that:

- Facilitates $XRD/$STAB trading.

- Provides price information for the interest rate controller.

- Supports liquidity provision and removal.

- Calculates real-time trading metrics.

### Liquidation Engine

[The protocol's liquidation system](https://docs.ilikeitstable.com/stab-protocol/using-stab-protocol/liquidations) implements a unique two-phase liquidation process:

1. $1

2. $1

### Flash Loan Implementation

[The system supports flash loans through the Stabilis Proxy Component](https://docs.ilikeitstable.com/stab-protocol/technical-info/components-and-manifests), with operations including:

- Atomic borrowing and repayment.

- Integration with other DeFi protocols.

- Transaction validation and revertion mechanisms.

### Development Tools and Resources

The Stabilis ecosystem maintains several technical resources:

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2. $1

3. $1

## See Also

- [Radix DLT](https://www.radixdlt.com/) - The underlying blockchain platform on which Stabilis is built

- [Decentralized Autonomous Organizations](https://en.wikipedia.org/wiki/Decentralized_autonomous_organization) - The organizational structure employed by ILIS DAO

- [Algorithmic stablecoins](https://en.wikipedia.org/wiki/Stablecoin#Algorithmic_stablecoins) - The category of digital assets to which STAB belongs

- [MakerDAO](https://en.wikipedia.org/wiki/MakerDAO) - A similar protocol that also uses collateralized debt positions

- [PID Controllers](https://en.wikipedia.org/wiki/PID_controller) - The control system used in STAB's interest rate mechanism

## References

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