LendrUSD (USDL)
Last updated
Last updated
LendrUSD (USDL) is an inflation-proof flatcoin offered by the Lendr Network. It is created through our decentralized interest-free lending platform.
LendrUSD is fully over-collateralized and allows any holder to redeem USDL at a 1:1 rate for its backing at any time. USDL is additionally secured by a Stability Pool and fellow borrowers acting as guarantors of last resort.
The Lendr ecosystem is designed to be fully decentralized and governance-free, relying on immutable public smart contracts.
LendrUSD offers users financial reward incentives for participating in various actions such as liquidations, USDL staking, LNDR staking, and LP creation. These actions keep the system stable and reliable.
USDL has a reward token (LNDRr) which collects ALL revenue generated by USRE lending fees.
LendrUSD offers users financial reward incentives for participating in various actions such as liquidations, USRE staking, LNDRr staking, and LP creation. These actions keep the system stable and reliable.
USDL is a specialized flatcoin with an inflation index pegged price target. This price target grows in exact accordance with the current inflation rate of the US Dollar. We used a specialized inflation index provided by an unbiased on-chain oracle. This oracle calculates the real inflation rate based on over 18 million data points from 30+ verified data sources.
As the price target moves, the LendrUSD pegging mechanisms (arbitrage through issuance and redemptions, and liquidations) ensure that the token price also moves accordingly.
LendrUSD is soft-pegged to the target price point, relying on incentivized user actions (arbitrage opportunities) to keep the token price close to the target price. This means that the exact value of USDL will fluctuate near the target price point.
Lendr flatcoins offer a unique set of features not seen in any other stablecoins.
Inflation-Proof: Every other major stablecoin is affected by inflation, losing their holder's spending power over time. Lendr offers an inflation-proof version of the U.S. dollar solving this issue.
Decentralized: Other stablecoins are centralized or use centralized backing, Lendr is decentralized and governance free making it more reliable and resilient compared to centralized companies.
Over-Collateralized: Other stablecoins claim to be over-collateralized but are not always transparent with what they are using as collateral. Lendr flatcoins are over-collateralized using verifiable on-chain assets.
Rewards System: Unlike other stablecoins, Lendr allows users to earn rewards with their flatcoins by staking them in directly in our lending platform.
We created LendrUSD as an answer to the significant risks and hidden costs that exist in the current stablecoin and banking markets:
Over 92% of the stablecoin market is centralized, this means trusting a centralized company that can be shut down by regulations at any time (i.e. BUSD).
Even "decentralized" stablecoins like DAI are backed using other centralized stablecoins.
Stablecoin holders lost more than $9 Billion USD of spending power last year to inflation. This hidden cost reduces any DeFi yields they may be earning.
The U.S. banks that have failed in 2023 so far controlled over $532 billion USD of depositor assets. People need a safer way to store their wealth.
Under collateralized stablecoins are high risk, as we saw with the Terra/Luna crash which cost investors over $60 Billion USD.
Most major decentralized stablecoins charge an ongoing interest rate to mint, slowing adoption and costing their holders money.
LendrUSD solves every one of these issues, providing users with a safer, stable asset that they can trust.
LendrUSD's main features are:
Inflation-proof flatcoin
Over-collateralized with verifiable on-chain assets
Decentralized and governance-free
0% Interest rate to issue/borrow USDL
Earn rewards from liquidations, issuance, and redemptions by staking in the USDL Stability Pool or LNDR Pool
Redeemable for 1:1 collateral by anyone at any time
Financial incentives to complete liquidations
Absolutely NOT! Terra/Luna was an algorithmic stablecoin that was under-collateralized and had critical design flaws. LendrUSD is the exact opposite:
LendrUSD is NOT an algorithmic stablecoin or flatcoin.
LendrUSD is fully backed and maintains 110%+ verifiable on-chain collateral.
LendrUSD is designed to handle bank runs or price drops if they ever occur. (see Recovery Mode and Redemptions)
LendrUSD was created to avoid the major issues that Terra/Luna and other stablecoins have.
No, ownership of the LendrUSD smart contracts is relinquished making them immutable. The code is also open source allowing anyone to interface directly with the smart contracts if needed.
This makes LendrUSD censorship and regulation resistant.
Note - At launch, the price target oracle contract ownership will be retained until a redundant system can be deployed. At this time there is only one oracle provider for the inflation index that LendrUSD uses. Once a redundant fallback is added, this contract will be decentralized as well. Learn more in the Inflation Index section.
Borrow USDL using collateral by opening a Trove
Earn rewards by staking USDL in the Stability Pool
Stake LNDR in the LNDR Staking Pool to earn fee revenue from users issuing or redeeming USDL
Redeem USDL for 1:1 backing if the price is below the target peg
Borrow USDL and sell it if the price is above the target peg
Complete Liquidations on troves under 110% collateralization to earn rewards
LendrUSD (USDL) is the inflation-proof flatcoin used to pay out loans on the LendrUSD protocol/dapp. USDL tokens can be redeemed for the underlying collateral by anyone at any time. Lendr Token (LNDR) is a secondary token issued by the Lendr Network protocol. It captures the fee revenue that is generated by the LendrUSD/flatcoins system and incentivizes early adopters. The total LNDR supply is 100,000,000 tokens.
For more information on how these tokens have been allocated and released please refer to the LNDR rewards and distribution page.
You will need a web3 wallet (e.g. Metamask) that is connected to a Lendr Network blockchain (e.g. Ethereum or Binance Smart Chain) and the native blockchain tokens (e.g. ETH or BNB) to open a trove and pay the gas fees.
To stake in our Stability Pool or LNDR Staking Pool, you will need USDL or LNDR tokens in your wallet. These can be issued through borrowing or obtained on Pancakeswap or other major exchanges that we are listed on.
USDL and LNDR have no additional transaction fees.
There are one-off fees paid when USDL is borrowed or redeemed.
For borrowers, there is a borrowing fee on loans as a percentage of the issued amount (in USDL).
For redeemers, there is a redemption fee on the amount paid to users by the system in the native blockchain tokens.
Note that redemption is separate from repaying your loan as a borrower, which is free of charge.
These fees are paid directly to LNDR Staking Pool stakers.
These fees are controlled completely autonomously by the smart contract code and do not involve governance from our team or community.
Both fees depend on redemption volumes, i.e. they increase upon every redemption in function of the redeemed amount, and decay over time as long as no redemptions take place. The intent is to throttle large redemptions with higher fees, and to throttle borrowing directly after large redemption volumes. The fee decay over time ensures that the fee for both borrowers and redeemers will “cool down”, while redemptions volumes are low.
The fees cannot become smaller than 0.5% (except in Recovery Mode), which protects the redemption facility from being misused by arbitrageurs front-running the price feed. The borrowing fee is capped at 5%, keeping the system (somewhat) attractive for borrowers even in phases where the monetary is contracting due to redemptions. Other than that, the two fees are identical and are depicted as "Fee" in the following exemplary chart:
There are two different ways to generate revenue using LendrUSD:
Deposit USDL to the Stability Pool and earn liquidation gains in collateral and LNDR rewards.
Stake LNDR in the LNDR Staking Pool and earn USDL and native blockchain tokens from borrowing and redemption fees.
Yes but its a little complicated! Here you go:
As a non-custodial system, all the tokens sent to the protocol will be held and managed algorithmically without the interference of any person or legal entity. That means your funds will only be subject to the rules set forth in the public smart contract code, which is being audited by multiple third-party companies.
There are two scenarios under which you may lose a part of your funds:
You are a borrower (Trove owner) and your collateral in ETH is liquidated. You will still keep your borrowed USDL, but your Trove will be closed and your collateral will be used to compensate Stability Pool depositors.
You are a Stability Pool depositor and your deposited USDL is used to repay debt from liquidated borrowers. Since liquidations are triggered any time borrowers’ collateral drops below 110%, you will receive more collateral in return with a very high probability. However, if the native blockchain token decreases in price and you maintain exposure, you may lose value in your total pool deposits.
Please note that USDL isn't perfectly pegged to the price target, and can deviate slightly in both directions under certain market conditions.
Although the system is diligently audited, a hack or a bug that results in losses for the users can never be fully excluded. Our bug bounty program helps ensure greater security but absolute security cannot be guaranteed. Please ensure you understand the system in its entirety before use.
Refer to our Quick Start Guide for short, simple explainer videos on how to use the network, and take a look at our FAQ Video Series for information explained by our CEO, Nathaji Metivier.
