Lending Vaults
Lending Vaults are where Borrowers would deposit collateral against which to mint JUSD. At present, the only collateral accepted by Lending Vaults is wstETH.
Acceptable Collateral for Deposit
At present, only Liquid Staked Ethereum (wstETH) will be accepted as collateral. In the future, other productive collateral will hopefully be included.
Borrowing Process
The Borrower Deposits wstETH into the the SLATE Lending Vault
The Borrower is then able to mint JUSD such that the the USD value of the wstETH is at least 150% of the JUSD minted.
The JUSD minted goes directly into the Borrowers wallet.
A 0.50% annual fee will be charged daily and accrue to the borrowers outstanding JUSD debt balance.
Repayment and Withdrawal Process
At any point, the Borrower can choose to withdraw wstETH collateral if its USD value exceeds 150% of the outstanding JUSD debt and accrued interest in the amount in excess of this 150% value.
The Borrower can also at any point pay down the outstanding JUSD debt. JUSD debt repayments first go towards repaying the accrued interest in its entirety which goes towards the Treasury's JUSD reserves. The balance of the JUSD repayment is burned and the corresponding amount of JUSD debt is reduced.
Liquidations
A Lending Vault enters Liquidation State when its collateral value falls below 120% of its outstanding JUSD debt (including accrued interest).
If the outstanding JUSD debt is ≥ 1,000, the protocol will liquidate 50% of the debt.
If the outstanding JUSD debt is < 1,000, the entire debt is liquidated.
Liquidations are executed by the SLATE Stability Fund, which repays the specified portion of the JUSD debt. In return, it receives collateral worth 110% of the JUSD repaid, valued at the current market price.
Example
A user deposits 1 wstETH and mints 2,000 JUSD. The overcollateralization ratio is 150%.
wstETH price drops to $2,400, reducing the collateral value to $2,400. The overcollateralization ratio becomes 120%, triggering liquidation.
The Stability Fund repays 1,000 JUSD (50% of the debt).
In exchange, it receives $1,100 worth of wstETH (i.e., 0.4583 wstETH at $2,400).
The Vault is left with:
0.5417 wstETH (~$1,300),
1,000 JUSD debt,
resulting in a post-liquidation overcollateralization ratio of 130%, bringing it out of Liquidation State.
To learn more about how liquidations are handled on SLATE, please see the Liquidation of Vaults section.
Notes
For a more predictable borrower experience, the Liquidation Overcollateralization Requirement and Interest Rate of a Vault are fixed for the lifetime of that Vault once it is opened.
However, in response to adverse market conditions, the protocol may impose stricter requirements on existing vault types—such as raising the Initial Overcollateralization Ratio for new mints or freezing further JUSD minting altogether. In such cases, users will still be able to add collateral or repay JUSD debt, but cannot mint additional JUSD from the affected vault.
To reflect evolving market conditions or improve risk management, the protocol may also introduce new Vault types with updated terms, including different interest rates and collateral requirements.
These changes are not made lightly and will be guided primarily by the performance of the JUSD peg and the liquidity available in AMMs and the Stability Fund.
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