Silk - Shade Protocol

Silk Stable is a private stablecoin tracking a basket of global currencies and commodities. Silk Stable is fast and agile, with 6 second transaction times. Launched by Shade Protocol and powered by Secret Network, Silk operates as an interoperability hub between global currencies – acting as perpetual hedge against macro volatility and inflation.

While holding Silk, users are protected from the volatility of the global economy without ever needing to interact with the complex hedging tools of centralized finance.

In short, Silk is easy to access stability – powering global commerce in Web3.

Features

List of Silk attributes:

Privacy-preserving

Fast (6 second transactions)

Retains purchasing power

Inflation resistant

Overcollateralized

IBC compatible

Tracks basket of currencies and commodities

Smart contract composable

Governance capable of adding or removing assets within the basket

Stability

Silk has three different key stability mechanisms:

Overcollateralized Minting

Stability Pool

Bonds

Overcollateralized minting follows the traditional MakerDAO model where users can deposit assets into smart contract vaults which programmatically liquidate users if their lending position reaches a critical level of collateralization that could negatively impact the overall stability of Silk.

The Stability Pool is a democratized pool where users can deposit their Silk to passsively earn yield from liquidations that occur within the Silk minting vaults. Whenever a liquidation occurs, Silk is programmatically removed from the Stability Pool and burned.

This process of burning Silk reduces the amount of protocol liabilities at large, increasing the protocol wide collateralization of Silk. In return for allowing their Silk to be burned, users that deposit Silk into the Stability Pool passively earn yield in the form of liquidated assets that were originally deposited into Silk minting vaults.

Examples of liquidated assets Stability Pool users might earn:

Bitcoin

Ethereum

Atom

SCRT

SHD

USDC

Bonds are the final stability mechanism of Shade Protocol. The ShadeDAO is capable of buying Silk off of the open market in return for assets bonds. Additionally, the ShadeDAO is capable of issuing SILK to the market in the form of a bond in the event of excess demand for Silk.