Safety Module
Safety Module is an important feature that will act as insurance and add more security to the protocol. Users can deposit their EGLD, MEX, RIDE, USDC, and HTM and earn rewards in the form of the HTM token. The Safety Module acts as a security layer to the protocol. In case of an unfortunate shortfall event, up to 30% of the staked liquidity can be used to cover the deficit.
We have come up with innovative solutions to use the liquidity deposited in the Safety Module to increase the protocol's liquidity and generate rewards that will be used to provide all the money markets with greater yields.
The Safety Module is built on top of the Lending Protocol; the ESDT tokens staked will be automatically supplied to the lending protocol, and the yields generated will be split among all the Money Markets and distributed as additional rewards.
The EGLD supplied to the Safety Module will have a slightly different path; it will be first sent to the Liquid Staking, which will generate more yields that will be distributed as additional rewards through all the money markets. The sEGLD minted will be supplied to the protocol’s lending app to increase its liquidity. When a user triggers a withdrawal request, the sEGLD will be instantly withdrawn from the lending protocol and used to unstake EGLD on the Liquid Staking; the pending cooldown on Liquid Staking is 15 days, while on the safety module, it’s 30 days.
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