Introduction

Unlocking Liquidity While Preserving Yield

Unstable Protocol enables users to borrow against yield-bearing assets without sacrificing their staking rewards. The protocol's stablecoin, nUSD, is overcollateralized by productive assets like liquid staking derivatives that continue generating returns while serving as collateral, creating a unique capital efficiency advantage.

Capital Efficiency

By enabling users to maintain exposure to staking rewards while accessing liquidity, Unstable creates a powerful capital efficiency multiplier effect:

• Dual-purpose assets: Collateral simultaneously secures loans and generates yield

• Self-improving collateral ratios: As yield accumulates, position health naturally strengthens

• Reduced liquidation risk: Growing collateral value provides increasing protection against market volatility

Robust Stability Mechanisms

Every nUSD is backed by more than $1 of high-quality collateral:

• Overcollateralization: Minimum 1XX% collateral ratio (varies by asset)

• Yield-bearing collateral: Assets like stETH, rETH, and other LSDs that grow in value over time

• Automated liquidations: Swift protection against undercollateralization

• Redemption mechanism: Direct 1:1 USD value redemption for underlying collateral

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