Unveiling Gravita Protocol: Interest-Free Borrowing on Ethereum’s LSTs
Discover an innovative Protocol finally enabling interest-free loans backed by Liquid Staking Tokens.
Gravita Protocol is launching soon, and it’s set to revolutionize the world of decentralized borrowing. Built on the Ethereum blockchain, Gravita Protocol offers interest-free loans secured by Liquid Staking Tokens (LST) and a Stability Pool (SP), providing users with a flexible and efficient borrowing experience.
With Gravita Protocol, loans are issued in the form of GRAI, a token designed with a volatility dampening mechanism similar to LUSD. Borrowers can obtain loans of up to 90% of the value of their collateral.
A wide array of novel features has passed through the hands of 2 established auditors, as well as a generous Audit Competition currently ongoing with Hats.
Novel feature #1
Gravita Protocol builds upon the Liquity economic model to ensure efficient borrowing and timely liquidations. Borrowers are charged a standard 0.5% borrowing fee upfront on each new debt or debt increase.
To incentivize short-term borrowing, the fee is refunded pro rata if the user repays their debt within six months (~182 days), with a minimum fee equivalent to one week’s interest.
The multi-collateral design of Gravita Protocol allows each position to have a single collateral type, all linked to the same stability pool. Borrowers mint GRAI against the value of their collateral, which can then be swapped for other assets, used to provide liquidity, or participate in the stability pool.
Novel feature #2
To reduce GRAI’s volatility, a redemption mechanism similar to Liquity will be enabled after the launch. Redemptions will allow GRAI holders to redeem 1 GRAI for $0.97 worth of collateral, effectively creating a 3% fee for redemptions.
Keep in mind that redemptions and debt repayments are separate mechanisms, and borrowers don’t incur a net loss during redemptions, although they may lose some collateral exposure. To avoid being redeemed against, it’s essential to maintain a low LTV percentage relative to other Vessels in the system.
Join the Gravita community today and follow us as we approach launch!
