Teddy Cash TVL Sails towards $10M TVL in under a month
Teddy Cash is one of the newer additions to the Avalanche space. Cementing itself as a popular lending protocol and stablecoin.
In this post
What is Teddy Cash?
- Stablecoin minter
- Lending protocol
Very similar to Liquity. Easier to draw comparison with Maker…
MKR/DAI is to Maker, as TEDDY/TSD is to Teddy Cash.
The Stablecoin
You can borrow TSD from Teddy Cash. By depositing AVAX, you’re issued TSD. The AVAX is used as collateral. The TSD is yours to spend as you please.
The TSD stablecoin is pegged to the USD. Chainlink provides the price feed. And there are mechanisms to keep the price stable.
Teddy cash balances the price well. Anyone can redeem underpriced TSD for $1 AVAX. And anyone can borrow TSD from the protocol priced at $1 USD to buy more of another stablecoin if TSD is overpriced.
The Lending Protocol
Touched on this previously. More detail on the lending.
Troves
Users open troves. Troves are opened when you deposit AVAX. They’re “abstract” stores for AVAX. They hold the collateral for loans.
- When you open a trove, you get TSD. Up to 90% of your collateral.
- When you close a trove, you get your AVAX back. 100% of it.
Why would I want to do this?
A number of reasons:
- You want to lever up. You borrow more against your AVAX, but your AVAX doesn’t go anywhere. You still maintain your position. But with more exposure to AVAX.
- You don’t want to sell your AVAX. But, you want to purchase something; perhaps a Pizza. Why lose upside potential by selling?
- You want high leverage. You can open a trove, to open a trove, to open a trove, 11 times over. Giving you pretty high leverage. Decentralized.
There could be more reasons. But, these are the most common.
Liquidations
When loans turn bad, they get liquidated. This protects the lenders, the borrowers, and everyone involved in the protocol.
The collateral that must be maintained by a trove is 110%. If a trove’s collateral value falls lower than this, it will be liquidated.
There are bots waiting for the trove’s collateral to fall. At which point, the loan is closed out.
Redemptions
A simple service where you can redeem TSD for AVAX. If you saw TSD trading on Pangolin at $0.95, you could buy it all up, then redeem it for $1 on Teddy Cash. Simple.
Farming opportunities
There are multiple.
- The Stability Pool; earn TEDDY & AVAX rewards on TSD. In excess of 4 figures APY at present.
- Teddy Staking Pool; earn TSD & TEDDY.
- TEDDY/AVAX farming; earn TEDDY.
- TSD/AVAX farming; earn TEDDY.
1 and 2 are single staking pools. 3 and 4 are LP farms.
Interested?
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