Facilitators

Facilitators are essential components in the Hatom USD ecosystem, tasked with the minting and burning of USH tokens. These entities employ various strategies to maintain the stability and security of the USH ecosystem. Each Facilitator is assigned a 'Bucket' with a designated 'Capacity,' indicating the maximum quantity of USH tokens they can mint.

The Governance system of Hatom, which administers the operations of USH, determines and adjusts this limit for each Facilitator.

Initial Facilitators

Lending Protocol

As the first facilitator of USH, the Hatom Lending Protocol plays a vital role in fostering stability within the Hatom USD ecosystem. Hatom employs an over-collateralized model, akin to its Lending Protocol, requiring users to deposit a higher value in collateral than the USH they intend to borrow. This practice minimizes the risk of default, ensuring a safe and secure lending experience.

A unique feature of Hatom is its ability to allow users to accrue yields on their deposited collateral while still retaining the capability to borrow against it. This feature enhances its appeal to users seeking additional passive income streams.

Furthermore, Hatom aids in initiating the supply of the USH stablecoin in a decentralized and permissionless way, thus allowing anyone to participate in the lending ecosystem and contribute to its stability.

Minting rates for USH are predetermined and vary according to the collateral type. The system is designed to prioritize the use of assets with lower APY for minting. For instance, if a user supplies $1000 worth of BTC and $1000 worth of USDC, a total of $1400 worth of USH can be minted. Considering that BTC has a -3.5% APY and USDC has a -2.5% APY, the protocol will initially utilize USDC due to its lower APY for the first $700 minted. Any minting beyond this amount is subject to the higher BTC APY. The overall APY is dynamically adjusted based on the proportion to each asset used after the initial $700.

Through this facilitator, users can use certain assets they have activated as collateral, with the unique aspect that interest on borrowed funds is paid to the protocol, which mints USH in return. This system ensures that the APY is not influenced by supply and demand dynamics but remains fixed per asset.

Please note: Users are able to mint USH using the Lending Protocol by leveraging various assets as collateral. However, this does not include EGLD and sEGLD. For minting USH with EGLD and sEGLD, users are required to utilize the Isolated Pool facilitator.

Isolated Pools

This facilitator offers users the opportunity to mint USH using either EGLD or sEGLD under specific conditions without a minting fee, streamlining the process and enhancing benefits.

Minting USH Using EGLD: Users can mint USH without receiving any supply APY on the provided EGLD with a 0% minting fee. During this process, the protocol automatically converts the supplied EGLD into sEGLD through Liquid Staking, which is then utilized within the Lending Protocol to generate the supply base APY.

Minting USH Using sEGLD: Similarly, sEGLD can be supplied to mint USH at a 0% Minting Fee, without earning any supply APY. Upon supplying, the protocol automatically converts the sEGLD's value to the equivalent amount in EGLD at the moment of supply, allowing users to mint USH. Once sEGLD is supplied, users cease to earn any Liquid Staking APY, with the conversion from sEGLD to EGLD being fixed at that specific point in time.

Upon withdrawal of the collateral, users are given the flexibility to instantly claim sEGLD or opt to wait 10 days to receive EGLD, providing additional liquidity options and user control over their assets

Please note: A portion of the revenue generated by EGLD and sEGLD, which users deposit to mint USH through the Isolated Pool, is reinvested into the sUSH to ensure its continuous yield generation.

Boosted Vaults

The Boosted Vaults provides users with a way to deposit various assets, such as EGLD, HTM, USDC, and USDT, and take part in liquidity provision and yield farming.

When a user deposits an asset, say EGLD valued at $1000, the protocol mirrors this action by minting an equal amount of USH. This USH is then paired with the deposited EGLD to form a Liquidity Pair (LP), which is subsequently used in farming liquidity pools on supported exchanges like AshSwap, DX25, or xExchange. This mechanism effectively doubles the user's farming capability, turning a $1000 deposit into a $2000 position, thus enhancing the potential rewards.

In this process, the LP is not held in the user's wallet but managed at the protocol level. It's important to note that users assume the risk of any impermanent loss. For instance, if the EGLD value decreases, the protocol's rebalancing action involves selling USH to maintain the 50/50 balance in the LP. But on the contrary, if the price of EGLD increases, then a part of it is sold for USH, resulting in a surplus of USH for the user. This excess USH, after the protocol adjusts the LP's composition to maintain the balance, effectively becomes a benefit for the user as now the user will have more USH than the amount that was initially minted.

Upon deciding to exit the liquidity pool, users must address the full amount of USH originally minted for the LP. This typically involves using a portion of their EGLD to purchase USH, thereby completely settling the debt. For a more detailed explanation of how impermanent loss works, please check this article.

To maintain control over the USH circulation generated via the Boosted Vault and to manage its impact on the APY in the Staking Module, the system implements caps on the maximum amount of USH that can be minted. These caps are proportional to the collateral supplied in the Isolated Pool for minting USH. For example, a cap could be initially set at 10%, but it adjusts downward in response to increases in the value of assets in the Isolated Pools. The cap adjustment follows a tiered approach based on the total liquidity provided in assets like EGLD and sEGLD.

Please note: Users can boost their APY through the governance tokens needed on each exchange that they decide to farm yield; if AshSwap is used, for example, the user can boost their position with veASH tokens by depositing them directly into the Hatom Protocol.

Become a Facilitator

USH's liquidity and market presence rely on Facilitators, selected and regulated by Hatom Governance, which assigns capacities and mandates adherence to a specific framework. This process, open for community input, aims to refine selection and strategy execution.

Facilitator Strategies

It's exciting to contemplate the innovative ways Facilitators could mint USH. This could result in the emergence of creative new strategies that enhance the value and utility of USH for its users.

For instance, Hatom's Lending Protocol, one of the initial Facilitators, employs an over-collateralized model. This ensures that USH is backed by more collateral than its actual value, providing an extra layer of security for its users. All strategies must prioritize the security and viability of the model to maintain a safe environment.

The Boosted Vaults feature an under-collateralized model, enabling users to access greater liquidity for yield farming. This allows users to generate liquidity pairs without having to sell any assets, thus enhancing profitability and capital efficiency.