Decentralized, exogenous stablecoin pegged to the US Dollar. Designed with security and stability in mind, it employs overcollateralization and robust mechanisms to ensure price stability and user protection.
- Collateral Ratio: The stablecoin is 200% overcollateralized.
- Minting Requirement: To mint DSC (Dollar Stablecoin), users must deposit collateral worth twice the amount of DSC they wish to mint.
- Health Factor: User positions are monitored for a Health Factor, which ensures the collateral is sufficient. Minimum Health Factor ratio 1
- Liquidation Incentives: If a user's Health Factor falls below the acceptable threshold, other users can liquidate their position. Liquidators are incentivized for performing this action.
- Oracle Price Feed: Stale price and sanity checks are implemented to validate the Oracle price feed, ensuring reliable price data.
- Freeze Mechanism: A system is provided to freeze critical functions during abnormal price fluctuations to protect the protocol. (This feature is currently commented out.)
Arithmetic employs multiple layers of checks and mechanisms to maintain the stability and integrity of the stablecoin:
- Overcollateralization ensures that the system remains solvent.
- Liquidation Mechanism incentivizes the community to maintain healthy positions.
- Oracle Sanity Checks ensure accurate pricing data.
- Freeze System acts as a safeguard against extreme price volatility.
Contributions to improve and extend the Arithmetic protocol are welcome. Please follow standard contribution guidelines and submit your proposals via GitHub.
This project is open-source and licensed under the MIT License.