Collateral Types
It is important to remain stable, secure, and decentralized
Fluid Protocol will support multiple collateral types. We have included a host of Liquid staking tokens which will allow massive amounts of liquidity to be unlocked, ensuring that there is enough collateral to grow the stablecoin market cap long-term.
Collateral Types Supported:
Criteria to add Liquid Staked tokens as a collateral type:
Deep liquidity to prevent Liquidation Cascades. Liquid staked tokens in general are not necessarily directly pegged to the underlying asset.
Trust minimized & timely redemption mechanism. If the liquid-staked asset can be easily redeemed for underlying collateral tokens, it greatly reduces the potential for Liquidation Cascade.
Potentially higher collateralization ratio for Liquid Staked tokens.
Oracle price feed
Collateral types we do not intend to support:
Centralized stablecoins like USDC/USDT
Centralized stablecoins such as USDC and USDT are subject to regulatory freezing and mismanagement of collateral by centralized issuance entities, again posing massive counterparty risk to a decentralized stablecoin protocol.
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