What is Aqua Protocol?
Эта статья на русском языке тут.
Aqua Protocol is a key liquidity layer in the TON ecosystem. It allows users to pledge various assets, such as liquid staking tokens (LST), low-risk LP tokens, and Real-World Assets (RWA), to mint the over-collateralized stablecoin AquaUSD. The minimum collateralization level is 150%, which makes AquaUSD resistant to market fluctuations.
Aqua Protocol is built on principles of full decentralization and transparency. This means that users can mint AquaUSD on their own, without relying on a centralized issuer, as is the case with USDT.
How is AquaUSD Different from USDT?
🔹 Collateralization
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AquaUSD: It is backed by at least 150% of TON ecosystem assets, such as staked TON (LST), LP tokens, and in the future, RWA. This collateralization is fully decentralized and transparent, and reserves can always be verified on the blockchain here.
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USDT: It is backed by fiat reserves held in the traditional financial system. Tether claims USDT is 106% collateralized, but the exact composition of these reserves is controlled by the company and is not always transparent.
🔹 Centralization vs. Decentralization
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AquaUSD: Completely decentralized. Its issuance is managed by users through the CDP (Collateralized Debt Position) mechanism, allowing them to pledge assets and mint AquaUSD on their own.
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USDT: Centralized. The issuer, Tether, decides how many tokens to issue and can freeze or block users' funds at their discretion.
It’s important to note that Tether profits from issuing USDT, while Aqua Protocol allows anyone to mint AquaUSD, enabling users to participate in liquidity generation and earn income.
🔹 Usage
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AquaUSD: Ideal for DeFi users who want to mint stablecoins by collateralizing their assets and use them in yield generation strategies.
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USDT: More commonly used on centralized exchanges and for payments, but users are dependent on the issuing company.
🔹 How to Get AquaUSD?
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Conservative Approach: Buy AquaUSD on the market like any other stablecoin.
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Advanced Approach: Pledge wrapped TON (tsTON, stTON, hTON, TON-SLP, LP Dedust) and USDT (USDT-SLP) in Aqua Protocol and mint AquaUSD on your own. The full list of collateral and links are available in the app here.
Each user can choose their strategy based on their risk profile:
✅ Beginners can simply buy AquaUSD and use it in DeFi.
✅ Advanced users can mint AquaUSD by collateralizing assets and apply strategies to increase yields.
Why AquaUSD is Not an Algorithmic Stablecoin
Some stablecoins operate using an algorithmic model, offering high capital efficiency but often suffer from insufficient collateralization. This makes them vulnerable to sharp price declines, as seen with UST (Terra LUNA).
🔹 AquaUSD is not an algorithmic stablecoin. It is based on the time-tested CDP (Collateralized Debt Position) model, which is used in the largest DeFi protocols:
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DAI (MakerDAO, TVL $3.7 billion) — has been operating since 2017, proving its stability and reliability.
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LUSD (Liquity) — has been successfully functioning since 2021 with a similar model.
Aqua Protocol draws on the best practices of these projects, creating a stable and transparent model for issuing AquaUSD, backed by TON ecosystem assets.
Over-Collateralization = Stability
AquaUSD is always backed by assets at a minimum of 150%, making it over-collateralized and protected from crisis situations, unlike algorithmic stablecoins. Its CDP model has been proven over time and guarantees stability.
Additionally, with the Redeem function, users can always exchange AquaUSD for the equivalent of $1 within the protocol itself, adding further confidence and liquidity. This makes AquaUSD a stable asset, free from the high risks associated with other types of stablecoins.
What Benefits Do AquaUSD and Aqua Protocol Offer Users?
Stablecoin Users (USDT and AquaUSD):
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Yield without Impermanent Loss: Conservative users can earn by providing liquidity in the AquaUSD/USDT pair on DEXs without the risk of impermanent loss. Additionally, they earn transaction fees, which are paid in stablecoins, creating another income source.
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Asset Diversification: For those who don’t want to rely solely on USDT but need to store stablecoins on the TON blockchain, AquaUSD provides a reliable alternative.
Liquid Staking Users and Liquidity Providers on DEXs:
- Users can use AquaUSD to boost yield from liquidity provision by applying the looping strategy — exchanging AquaUSD for USDT and reusing funds to mint more. This allows, for example, earning up to 100% annually by providing liquidity in USDT on the perp DEX Storm Trade or tripling returns from liquid staking. Additionally, this approach gives farming leverage, enabling users to earn incentives, tokens, and points from multiple projects without needing to buy successful project tokens from the market.
Users Who Need Liquidity Without Selling TON:
- Collateral for TON: Aqua Protocol offers the ability to use TON assets as collateral to obtain liquidity without selling them. This is ideal for users who don't want to sell their TON at low prices but need liquidity for other purposes, such as withdrawals, cross-chain transfers, or participating in Ton Foundation activities.
Conclusion
Aqua Protocol offers users a unique opportunity not only to participate in the decentralized issuance of the AquaUSD stablecoin but also to earn actively on their assets without selling them. Thanks to the CDP model and over-collateralization, AquaUSD provides stability and reliability, making it an excellent alternative to traditional centralized stablecoins like USDT. Aqua Protocol opens new possibilities for users interested in DeFi and improving the yield on their assets.
With Aqua Protocol, you can create safe and profitable liquidity strategies, minimizing risks while benefiting from the assets of the TON ecosystem. Whether you are new to the cryptocurrency world or an experienced DeFi user, Aqua Protocol provides solutions for anyone looking to maximize the yield on their investments while remaining part of a secure and transparent ecosystem.
Join Aqua Protocol and start working with AquaUSD today! 🚀
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