ShadowLoan [NEW]
ShadowLoan is a decentralized borrowing and stability platform built on Polygon, leveraging gold as collateral to create a reliable and rewarding ecosystem.
ShadowLoan: At a Glance
ShadowLoan is a decentralized borrowing and stability platform built on Polygon, designed to provide users with a way to leverage gold-backed assets while maintaining stability, transparency, and rewards. It’s based on Liquity’s proven model, tailored to bring innovation and reliability to our community.
In simple terms:
Deposit collateral (gold as PAXG).
Mint stablecoins pegged to USD.
Earn rewards while supporting the protocol’s stability.
How It Works
Vaults (TroveManager):
Users deposit collateral into vaults to mint stablecoins.
Vaults are safeguarded by liquidation thresholds, ensuring solvency.
Stability Pool:
Users deposit stablecoins into the Stability Pool.
This pool absorbs liquidations, stabilizes the system, and rewards participants with native tokens.
Fees & Rewards:
Borrowing and redemption fees provide revenue.
Rewards include the protocol’s native token and potentially gold-backed assets.
DAO Governance:
Future decisions, including treasury allocations and system upgrades, will be managed by a community DAO.
Minimums and Collateral Ratios
ShadowLoan requires a minimum loan amount of $400 USDS, which translates to approximately $800 in PAXG collateral at the time of loan initiation. This reflects a collateralization ratio of 200%, which is a desirable and strategic benchmark for the following reasons:
Stability and Security: Maintaining a 200% collateralization ratio ensures the system remains robust, even during market fluctuations. By requiring double the loan amount in collateral, the risk of liquidation is significantly reduced for borrowers.
Volatility Mitigation: Gold, while relatively stable, is not entirely immune to price fluctuations. A 200% collateralization acts as a buffer, protecting both borrowers and the system against sudden market dips.
System Health: A higher collateralization ratio ensures the protocol remains overcollateralized, fostering trust and long-term viability for all participants.
User Protection: Borrowers with a 200% collateralization have more breathing room to manage their loans without immediate risk of liquidation, offering greater flexibility and peace of mind.
This requirement balances accessibility with security, providing users with a straightforward and resilient borrowing framework. It also ensures that ShadowLoan operates as a sustainable, efficient ecosystem, ultimately benefiting all participants.
Key Features
Built on Polygon: Low fees and high scalability.
Gold-Backed Collateral: Stability in volatile markets.
Transparent Mechanics: Ten smart contracts ensure decentralized operations.
Community-Driven Governance: A future DAO empowers user participation.
Fully audited. View the audit here.
Why It Matters
Revenue Potential: Liquity and its forks have generated over $35 million in protocol fees, proving the success of this model.
Reliable Collateral: Gold provides a hedge against market volatility.
Proven Foundation: Liquity’s mechanics, deployed with enhancements for our unique approach.
My original master plan: A Self-Sustaining Wealth Loop
Buy and Hold ShadowGold (SDG): As a holder, you earn passive rewards in real gold (PAXG).
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Reinvest Your PAXG: Take your earned PAXG and put it to work by opening a ShadowLoan Trove (collateralized lending). Use PAXG as collateral to mint USDS (the ecosystem's stablecoin).
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Earn Through the Ecosystem: With your USDS:
Stake it in the Stability Pool to earn liquidation rewards in both PAXG and SLT.
Diversify your earnings with Staking Pools for consistent yields.
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Reinvest and Expand: Loop back by:
Converting PAXG rewards into more ShadowGold to increase your stake in the system.
Adding to your Trove or staking positions to multiply your rewards.
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The Compounding Loop: Watch as your participation compounds wealth—holding, earning, reinvesting, and growing. This system is designed to fuel itself, rewarding commitment to the ecosystem.
What’s Next?
ShadowLoan is not the final destination—it’s proof of our ability to build and deploy a sophisticated system that will ensure our ride into the future. The roadmap includes:
Standalone Deployments: Expanding beyond Polygon to new ecosystems.
DAO Implementation: Putting governance in the hands of the community.
Ecosystem Expansion: Introducing new utility, integrations, and partnerships.
This is just the beginning. Together, we can shape a more innovative, decentralized future.
Addressing the Narrative
We’ve faced challenges—tightening regulations, market volatility, and the evolving DeFi landscape—but we’ve kept building. This protocol is our statement:
Proof of resilience.
Proof of capability.
Proof of progress.
I know, gold and Polygon haven’t captured the attention we envisioned, but this foundation allows us to pivot, evolve, and deliver something extraordinary. Change isn’t failure—it’s growth. With love - E.
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