# 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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