V1 Winddown Part 1. STBL Complexity Reduction and Winddown


At its inception, STBL offered an innovative alternative stable coin formulation built directly on the Algofi v1 lending platform. As the community and liquidity grew a number of mechanisms were put in place to help STBL maintain its peg. With the migration to the v2 protocol and STBL2 close to completion, a new framework is needed to A) mitigate the effort needed to maintain STBL and B) ensure that as STBL continues to draw down it does so gracefully.

The actions proposed here are the first step towards transitioning the Algofi v1 lending protocol to a steady state, freeing up the community and core team to focus their efforts completely on the v2 protocol and expanding its capabilities through modular additions.


Item (1) will be acted on immediately. Items (2) and (3) will be acted on simultaneously pending the completion of technical work to enable (3).

  1. Change the STBL interest rate modulation formula to a 3% hike or reduction executed MONTHLY based on the average STBL price in the week leading up to the end of the month.
  • After (2) and (3) have been executed, if AMM liquidity falls under 100k for a period of 1 week the rate will be set to a constant 12.5%, updatable by DAO vote only
  1. Sunset both the STBL/USDC LP Staking Contract and the STBL Staking Contract. These will cease to pay out STBL and be converted to “remove only” staking contracts visible on the v2 “Farm” tab as well as the v2 “Stability” tab.
  2. Implement a 1-to-1 STBL/USDC swapping contract seeded with the STBL interest currently in the STBL reserves. This allows for a pricing cushion as STBL liquidity continues to draw down.
  • Supplies of STBL and USDC will be constrained by the STBL reserves and any USDC used by users to buy that STBL
    ** Any residual reserves will be reclaimable to the DAO treasury at a point in time when the DAO has determined STBL has fully unwound

So if you have STBL that you wish to sell 1:1, first a user would have to buy with STBL with USDC for it to be available on the contract?

How much STBL is in the reserves?

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1-1 STBL-USDC would’ve been nice for me when I migrated over! Don’t be like me, and eat the cost without thinking of ways to migrate it efficiently.