Introducing Zunami APS: Algorithmic Peg Stabilizer
Introduction
We are excited to unveil the latest addition to Zunami Protocol — the Automatic Peg Stabilizer (APS). In this article, we will delve into the details of this innovative entity that allows users to stake $UZD within the protocol’s interface. Inspired by successful mechanisms like AMO from FRAX and Elixir from Alchemix, APS plays a crucial role in maintaining the peg of dollar stablecoins to $1.
Maintaining Balance
APS ensures the correct proportion in the UZD/FRAXBP pool on Curve by actively addressing imbalances. Let’s explore its functionality through an example. If there is an increase in the FRAXBP proportion within the pool, APS efficiently withdraws USDC, deposits them into Zunami, mints UZD, and then reinjects them back into the pool. Conversely, if the pool contains an excess of UZD, APS withdraws them to a vault strategy or performs UZD redemption, subsequently withdrawing USDC and depositing them into the UZD/FRAXBP pool.
Benefits for Users
APS is conveniently accessible through the new UZD Staking section on our website, offering users a range of advantages, including:
- Inexpensive deposit/withdrawal of funds facilitated by the vault strategy.
- Automated selling and reinvestment of rewards.
- Diversification and rebalancing of funds across UZD pools on various DEXs.
A New Era
With the launch of APS, Zunami enters a new era where $UZD, alongside other aggregated stablecoins (such as zETH, zCRV, etc.), becomes the primary product, while the aggregators operate behind the scenes. As part of this transition, we plan to phase out the ability for users to independently mint/redeem $UZD and deposit directly into the aggregator. Instead, users seeking native $UZD yield can conveniently purchase it through a DEX and maximize their yield potential by staking it in APS.
APS Strategies
At launch, UZD APS will utilize the following strategies:
- Vault strategy
- UZD/FRAXBP on StakeDAO
- UZD/FRAXBP on Convex
- UZD/BB-a-USD on Balancer
- UZD/FRAXBP Vault on Concentrato
Experience the Zunami APS: Embrace the power of Zunami APS and secure the best yield opportunities in the market. By utilizing our APS, users can enjoy enhanced stability, efficient fund management, and the prospect of optimal returns.
Join us as we embark on this exciting journey towards a more stable and rewarding future with Zunami Protocol.
