$STAB
Stabilis is a decentralized financial ecosystem built on the Radix DLT 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
- ILIS DAO
- STAB Protocol
- Development History
- Technical Infrastructure
- ILIS DAO
- Organization
- Governance Structure
- Membership System
- Proposal System
- Token Distribution and Economics
- Incentive Structure
- Technical Implementation
- STAB Protocol
- Overview
- Technical Architecture
- Loan System
- Stability Mechanisms
- Liquidity System
- Risk Factors
- Technology
- Core Components
- Resource Tokens
- Technical Features
- Automated Market Maker (AMM)
- Liquidation Engine
- Flash Loan Implementation
- Development Tools and Resources
- See Also
- References
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: 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 $STAB.
ILIS DAO
The ILIS DAO is incorporated as a non-profit Decentralized Autonomous Organization in the Marshall Islands under the legal name "I Like It Stable DAO LLC." The organization operates under the Marshall Islands DAO Act and is structured to ensure transparent, community-driven governance of the Stabilis ecosystem. The DAO's primary mission is to build, manage, and support open-source software for digital stable assets on the Radix DLT platform.
STAB Protocol
The STAB Protocol represents the first protocol governed by the ILIS DAO, designed to provide a stable asset ($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, 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, 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 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 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."
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, 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. The governance process involves members voting on proposals through a dedicated Voting Smart Contract, 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. 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. 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 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. 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 $LPSTAB tokens for liquidity provision.
Technical Implementation
The DAO's technical infrastructure is built on the Radix DLT platform and includes several key smart contracts:
The DAO maintains its official online presence at ilikeitstable.com, where members can access governance features, documentation, and participate in DAO activities.
STAB Protocol
Overview
The STAB Protocol is the first protocol developed under the governance of the ILIS DAO, designed to provide a stable asset ($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, 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. 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.
- Currently, only XRD (the native token of Radix) is accepted as collateral.
Loan management features 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:
- Interest Rate Controller
The protocol uses a dynamic interest rate system 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 follows the formula:
interest_rate -= (kp * (price_error / internal_price) + ki * (average_of_last_50_prices / internal_price))) * passed_minuteswhere kp and ki are controller constants, and price_error is the difference between market price and internal price.
- Liquidation System
The protocol includes a two-step liquidation process 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.
- Additional Stability Features
The protocol includes redemptions and forced minting mechanisms 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 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 for liquidity providers using the formula:
7_day_real_apy = ((lp_valuation_now / lp_valuation_7_days_ago)^(365 / 7) - 1) * 100This 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:
- Smart Contract Risk: Potential vulnerabilities in the protocol's code could lead to stuck or drained resources.
- Liquidation Risk: Loans may face liquidation if their collateralization ratio falls below the MCR, resulting in penalty fees.
- Oracle Risk: The potential for oracle manipulation could lead to inaccurate price feeds and improper system actions.
- Depeg Risk: Market conditions might cause $STAB to trade significantly away from its target price, potentially making loan repayment or liquidation difficult.
These risks are actively monitored and managed through the protocol's governance mechanisms and technical features.
Technology
Core Components
- Voting Infrastructure
- The Voting Token Smart Contract, located at
resource_rdx1t4r86qqjtzl8620ahvsxuxaf366s6rf6cpy24psdkmrlkdqvzn47c2, manages the ILIS governance token system. - A dedicated Voting Smart Contract at
component_rdx1cpzm6rgdwgw9p075zsh5kfjuxa9rzzyt47x6xcgzhzydp9lkymyx78handles proposal processing and vote counting. - Stability Mechanisms
- The Stabilis Proxy Component manages advanced operations including:
- Flash loan functionality.
- Redemption operations.
- Forced minting capabilities.
- A PID controller implementation manages the dynamic interest rate system.
Resource Tokens
The ecosystem utilizes several resource-oriented tokens:
- $ILIS Token
- Functions as the governance token.
- Represents membership in the DAO.
- Used for voting on proposals.
- Can be staked for rewards.
- $STAB Token
- The protocol's stable asset.
- Created through collateralized borrowing.
- Subject to dynamic interest rates.
- Used in liquidity pools.
- $LPSTAB Token
- Represents liquidity provided to the $XRD/$STAB pool.
- Tracks liquidity provider positions.
- Used for claiming trading fees and rewards.
Technical Features
Automated Market Maker (AMM)
The protocol includes a built-in AMM 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 implements a unique two-phase liquidation process:
- Marking Phase
- Allows liquidators to identify unhealthy positions.
- Implements a 5-minute delay before execution.
- Issues Marker Receipts to track liquidation rights.
- Execution Phase
- Processes liquidations according to protocol parameters.
- Distributes liquidation penalties between liquidators and the protocol.
- Includes fallback mechanisms for uncompleted liquidations.
Flash Loan Implementation
The system supports flash loans through the Stabilis Proxy Component, 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:
- Documentation
- Comprehensive protocol documentation.
- Technical specifications and parameters.
- Integration guides and examples.
- Smart Contract Interfaces
- Component manifests.
- Flash loan templates.
- Interaction examples.
- Development Environment
- Built on Radix's Scrypto language.
- Utilizes Radix Engine v2.
- Leverages Radix's component-based architecture.
See Also
- Radix DLT - The underlying blockchain platform on which Stabilis is built
- Decentralized Autonomous Organizations - The organizational structure employed by ILIS DAO
- Algorithmic stablecoins - The category of digital assets to which STAB belongs
- MakerDAO - A similar protocol that also uses collateralized debt positions
- PID Controllers - The control system used in STAB's interest rate mechanism
References
- "Protocol Overview - Stabilis Ecosystem". ILIS DAO.
- "STAB Protocol for Dummies". ILIS DAO.
- "ILIS DAO Documentation". ILIS DAO.
- "System Parameters". ILIS DAO.
- "Interest Rate Documentation". ILIS DAO.
- "Dangers". ILIS DAO.
- "Real 7d APY". ILIS DAO.
- "Components & Manifests". ILIS DAO.
- "Operating Agreement of I Like It Stable DAO LLC". ILIS DAO.