CIP #16 - Yield-Bearing Stablecoin Index on BNB

Status: Proposed
Discussion link: Yield Bearing Stable Coin Index on BNB
Created: 2/19/22

Executive Summary

BNB Chain is an open, programmable smart contracts platform designed to help decentralized applications scale and process transactions more efficiently.

Backed by the renowned Binance exchange ecosystem, the BNB Chain (formerly Binance Smart Chain (BSC), was launched in September 2020 as an alternative to the Ethereum Network. BNB Chain has gained critical acclaim from blockchain experts for its speed, cross-chain functionality, and significantly low transaction costs.

In addition to the efficiency of the BNB chain, another crucial attractive feature of the BNB Chain is the availability of a wide-range of stablecoins. As a matter of fact, 4 of the top 5 of the world’s largest stablecoins by market cap are available on BNB.

A stablecoin is a class of cryptocurrencies that attempt to offer price stability through the backing of a reserve asset - usually a fiat currency such as the $USD. Stablecoins have gained traction globally as they offer a unique utility in terms of a secure, instant processing of payments without having to go through the inefficient and expensive fiat-banking system. and the volatility-free stable valuations of fiat currencies. Furthermore, Stablecoins allow people to easily swap between different cryptocurrencies. Most importantly they also offer users a chance to hold cryptocurrencies that are immune to the drastically volatile trends that have characterized the blockchain markets.

With the advent of yield-bearing protocols like Venus and Alpaca, passive income opportunities have now emerged for Stablecoin holders.

Proposed Solution

Launch a BNB Chain Stablecoin Index on the Cook Finance Platform.

Components of the Yield-Bearing Stablecoin Index

  • vUSDT (USDT deposited in Venus Protocol)
  • vUSDC (USDC deposited in Venus Protocol)
  • ibBUSD (BUSD deposited in Alpaca finance)
  • vDAI (DAI deposited in Venus Protocol)

Rationale

  • The Yield-bearing stablecoin index will enable BNB users to access an Indexed asset that encumbers yield bearing vaults through the COOK Finance platform.
  • The components in the Index shall consist 4 of the top 5 largest stablecoins. They are backed by highly-secure infrastructure and billions of dollars worth of locked reserves in their vaults.
  • The index will provide a veritable source for users to generate passive income since these major stable coins are deposited into viable lending protocols such as Venus and Alpaca.

Specification

  • The allocation of funds shall be based on each stablecoin’s vault TVL on the deposited lending protocol.
1 Like

It’s a good idea, it will provide a veritable source for users to generate income

Judging by the Crypto market situation, i believe this suggestion is what we need and i will happy if the Cook team add it.

For safety and security investor interest. I want to see Cook launch this index.

This is an interesting recommendation. I support it.

due to volatility and the bad market situation, having a stable value currencies (stablecoin) index will be good for the users. Just like the stablecoin index on the Avalanche chain.

I will vote yes for this. It’s gonna be the index that I will issue when I need an index with a more stable value. It could be a safe index for swap when other indexes are in a downtrend.

There is great need for yield bearing stable coin index on BnB this present time since it will allow bnb users to easily access the index with ease.