It’s been a clear consensus that stablecoins are one of the PMFs in the crypto ecosystem. As the stablecoin market cap has reached almost $140 billion, we can assume that this market will continue to grow significantly in the future.

As the success of $USDT and $USDC made builders realize that stablecoins are a profitable business, several teams have been trying to build their stablecoins. Those builders have been developing different types of stablecoins to offer different value propositions or competitive advantages so that they can have a share in the pie. $DAI and $LUSD are prime examples of such efforts with the CDP models. Lately, with the rise in liquid staking derivatives, we saw that new models could be developed such as Gravita, Lybra Finance, Ethena Labs, and F(x) Protocol.

The Avalanche ecosystem had also its native stablecoin protocols such as Platypus, Yeti Finance, and Moremoney. However, due to several reasons, they failed.

We believe that the Avalanche ecosystem should have its native stablecoin with an innovative model that can offer new use cases for LSTs, competitive yields for stablecoins, and new DeFi primitives while challenging the competitors across chains, so we decided to build Stable Jack.

What is Stable Jack?

Stable Jack is an Avalanche native LSTfi protocol that partitions AVAX volatility into two products to have a new yield-bearing stablecoin, called aUSD, while also creating a volatile AVAX token, called xAVAX.

By doing this, we are developing a yield-bearing stablecoin that offers:

• Capital efficiency

• No liquidation risk

• No exposure to centralized party risks

Also, we are building a volatile AVAX token that offers:

• DeFi composability

• No funding fees

• An extremely low risk of liquidation

TLDR; The protocol splits AVAX into two products:

a) aUSD: a decentralized and yield-bearing stablecoin

b) xAVAX: a zero-cost leveraged long AVAX position that absorbs the volatility of AVAX price movements to stabilize aUSD

Users can supply USDC, USDT, AVAX, or sAVAX to mint either one of the tokens (all tokens are zapped into sAVAX before minting). In the future, we plan to add yyAVAX and ggAVAX as collateral.

For aUSD, the goal is to produce a stablecoin that is:

1. Avalanche-native

2. Yield-bearing

3. Fully decentralized

4. Backed by AVAX LSTs

5. Scalable than CDPs

Specifically for xAVAX, we create a leveraged long AVAX token which:

1. Avalanche-native

2. Fully decentralized

3. Composable, with liquidity on-chain

4. Has an extremely low risk of liquidation

5. Zero funding costs

6. 1-4x effective leverage

Note: You can think of xAVAX as a tokenized perpetual contract that can be used in DeFi. Why did we decide on this model?

Everyone knows about CDP models which create an over-collateralized debt position so that users can borrow stablecoins. However, this model has its limitations.

1. Liquidation risk

2. Borrowing fees

3. No inherent yield for the stablecoin

4. Required to constantly manage the position

5. Lack of scalability

As a result of these reasons, we realized that we need to find a new solution to tackle these problems. Stable Jack is the solution that we came up with.

Who are we?

We are 3 co-founders who have been in the ecosystem for a very long time (Caesar, Cihan, and Solomon).

Our team is uniquely positioned to build this product because we’ve been in the ecosystem since the mainnet launch, so we’ve been able to experience the growth of Avalanche. We have a vision for the future of the ecosystem and can detect the problems thanks to our prior knowledge. This allows us to develop solutions to solve the Avalanche’s existing problems.

As we have been in the Avalanche ecosystem for a long time, we were able to develop strong relations with other protocols/founders and necessary actors to scale this product. We already partnered with several protocols to work with when the product launches.

We have been backed by many well-known ecosystem partners such as BENQI founders and Yield Yak teams and also Avalanche native angels such as Beast, Xavier, and Vivek. You can just reach out to us if you want to be part of our esteemed angels.

How to be a part of the Stable Jack ecosystem?

You got questions? We’ll share more details about the product mechanism soon! To stay updated, follow our socials and join our community!

If you’re an early member of our community, you will have several advantages, so, don’t miss this opportunity 🙂

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