zunStables (zunUSD/zunETH) are ERC-20 stablecoins innovatively minted using the Omnipools as a collateral. These stablecoins are intricately linked to depositor contributions within Zunami's omnipools, ensuring a direct 1-to-1 peg to either the US Dollar or Ether.
Fundamentally, zunStables backed by strategies that provide liquidity to Curve pools, generating substantial returns. The entirety of the yield generated from zunStables collateral is distributed among ZUN token stakers. In a reciprocal process, the protocol distibutes ZUN emmision,incentivizing pools with zunStables and thereby establishing a self-sustaining economic cycle.
zunStables are 100% collateralized and incorporate a safeguard against depegging through the Algoritmic peg stabilizer mechanism. This mechanism manages minting and redemption based on the proportion within the curve pool
An additional layer of security lies in the selection of stablecoins for use in Omni pool strategies. If any stablecoin deviates by more than 4% from its peg, an automatic exit from the position is activated.
zunStables deftly address the three-fold challenge of stablecoins:
Decentralization: DAO voting facilitates the management of collateral allocation, driving decentralization in the ecosystem.
Capital Efficiency: Leveraging Omnipools as collateral and channeling earnings incentivizes a capital-efficient approach.
Depeg protection: Both the Algorithmic Peg Stabilizer (APS) and crisis-oriented strategies like recapitalization and automatic withdrawal safeguard zunStables from depegging risks.
In essence, zunStables not only pioneer a novel approach to stablecoin issuance but also provide a secure, decentralized, and capital-efficient solution that reconciles the challenges inherent in stablecoin stability and governance.