The DEUS Collateral system
The best overview of how the DEUS collateral system works can be taken from the Radix Podcast with Piers & Lafayette. https://www.youtube.com/watch?v=v_q5RaxXWWU&t=666s
Trading is usually referred to as a zero-sum game because gaining is equivalent to someone else losing. This is the long-term means traders paying each other out. Now, at the beginning, where there is a disbalance of traders or more are just profiting, then losing the exchange is the one that pays out.
The overall collateral bigger picture:
(((((((Longs / Shorts ) - Funding rate (V2) ) Synchronizer Balance) Vaults) DEA Insurance Fund ) DEUS ETH Treasury)
- Longs pay Shorts,
- A funding rate gets applied on an hourly basis (will be implemented in DEUS V2) Funding rates explainer: https://www.binance.com/en/support/faq/360033525031
- initial / short term liquidity shortages are backed up by the synchronizer balance itself, ETH MAINNET (0x7a27a7BF25d64FAa090404F94606c580ce8E1D37).
- Vaults as explained in the next Section
- DEA Insurance Fund covers Black Swan Events (currently at 18 Million Dollar) ETH Mainnet 0xd9775d818fc23e07ac4b8efd4c58972f7c59bc0f[https://etherscan.io/address/0xd9775d818fc23e07ac4b8efd4c58972f7c59bc0f]
- DEUS ETH Treasury, covers the whole system as a last resort.
DEUS V1 How does it currently work?
DEUS V1 is mainly based on over-collateralization, meaning Liquidity Providers or so-called "Vault Stakers" are locking,
as collateral approved assets into timelock contracts the so-called "Vaults."
Date: April 2021 $37,729,725 locked as collateral.
can be verified here in real-time:
Then there is the Synchronizer Cap, which is currently set to 1,000,000 DAI on xDAI & 500,000 DAI on ETH Mainnet, so a total of 1,500,000 DAI. The over-collateralization rate is, therefore, currently set to 1:25.
For every dollar that can be traded on the DEUS platform, 25 Dollars have to be locked inside the vaults.
A more detailed description of how exactly the Profit is transferred from the Vaults to the Synchronizers will be released together with the Vault exit system currently being developed.
How will DEUS V2 and the funding work?
When the information from the Radix & DEUS podcast wasn't enough for you yet, stay tuned. We are currently working on a full Whitepaper describing our Ideas and planned implementations of a fully decentralized funding system.