Got LSDs and want to put them to work?
If you’ve ever wondered about unlocking the liquidity of your yield-bearing assets (LSDs, LPRs, Vault Tokens), Seneca Protocol offers a solution.
What will it look like?
You have LSD -> Deposit it as collateral -> Borrow senUSD -> Use it however you want
The best part is that you keep the yield on your yield-bearing assets.
DeFi, in my opinion, has long lacked such a protocol, as you will see next.
But how does it work?
Seneca Protocol builds omnichain lending (first on Arbitrum) for DeFi with isolated lending Markets for Exotic Collaterals.
Seneca protocol utilizes so-called CDPs (Collateralized Debt Positions)
Each asset belongs to an isolated pool (“Apricus Chamber”), so each lending market on Seneca is independent, and the protocol remains risk-resistant.
Exotic collaterals include all of the types of assets I mentioned above.
This is the superiority of CDPs over classic lending solutions.
The risk asset affects only the risk of the pool, while the other pools and the entire protocol as a whole are not affected by it.
This is a great strength in my opinion, because each market participant can decide how much risk he is willing to take. Furthermore it will raise the Loan-to-Value ratio.
Isolated pools have some significant advantages in addition to risk-resistance:
- Collateral Flexibility
- Better Loan-to-Value (LTV) Rates
Collateral flexibility is another extremely useful feature of the protocol, if you ask me.
As a DAO member, I will have a say in which assets are added to the whitelist. In theory, I’ll be able to borrow against assets that I’m interested in that aren’t available through other lending sources.
How do I think it could be useful?
That looks like a pretty cool thing to me. With so much more leverage, the variability of strategies will increase, which will increase yields even more.
How can you do this?
Collateral LSD -> mint senUSD -> Buy more LSD -> repeat
Just remember to keep an eye on the collateral ratio!
The Collateral Ratio is a measure of the collateral on your loan.
If the value of the collateral falls below a certain threshold, the CDP may be liquidated to cover the loan.
Once launched, the Seneca Protocol will be governed by a DAO (“Senate”) based on the veSEN token.
- Revenue Redistribution
Ready to earn yield while keeping your stablecoins for buying other bullish tokens? Seneca Protocol gives you that opportunity