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Davos Protocol (DAVOS) Introduces Novel Yield-Generating Stablecoin on Proof-of-Stake

Mon, 04/24/2023 - 13:10
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Vladislav Sopov
Here's how Davos Protocol (DAVOS) changes game in segment of stablecoin-based yield instruments
Davos Protocol (DAVOS) Introduces Novel Yield-Generating Stablecoin on Proof-of-Stake
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While 'yield farming' on DeFi assets remains too risky and loses its traction during bear markets, investors are looking for new passive income strategies with more predictable annualized yields. Stablecoin-based protocols can address all major roadblocks of conservative yield-generating instruments in 2023.

Davos Protocol (DAVOS) introduces stablecoin-based yield farming protocol with amazing APY

Introduced in early 2023, cryptocurrency ecosystem Davos Protocol (DAVOS) offers pools for "yield farming’" based on DAVOS, its native stablecoin pegged to the U.S. Dollar.

Image by Davos Protocol

Holders of DAVOS can participate in the staking process for the Davos Protocol. For doing so, they are rewarded with periodic payouts proportionally to the size of their contribution. On average, DAVOS stakers can enjoy 7-9% in annualized percentage yield (APY).

Crypto enthusiasts who lock DAVOS in the protocol's staking pools acquire it by getting into collateralized debt positions (CDPs). During the entire period of staking, DAVOS tokens are over-collateralized by Polygon (MATIC), one of the most popular EVM ecosystem assets. The collateralization ratio for the protocol is capped at 150%.

The whole design of the protocol is fully decentralized: staking, lending and borrowing operations are executed via smart contracts, and no centralization points are integrated into its architecture. As such, users should not worry about potential price manipulations, hacks and money losses. Also, its APYs are much higher than those of stablecoin-based programs offered by centralized cryptocurrency services.

Leveraging power of proof of stake (PoS) for passive income

Also, the service uses restaking instruments to generate revenue and payouts for its customers. Namely, it uses Polygon (MATIC) collaterals in the staking dashboards of third-party services.

Namely, this collateral deposited is being used in liquid staking derivatives (LSD) applications to generate yield-bearing rewards for Davos Protocol (DAVOS). The platform routes its Polygon (MATIC) liquidity to Ankr Protocol's (ANKR) liquid staking modules. Then, these MATIC tokens are leveraged to maintain the integrity of Polygon (MATIC) blockchain.

As a reward for its contribution and liquidity, Davos Protocol (DAVOS) receives an equivalent amount of ankrMATIC LP tokens. Thanks to the auto-compounding mechanism by Ankr Protocol (ANKR),  the yields are growing in value without additional investments.

Last but not least, the protocol generates extra income when it lends the liquidity received from DAVOS borrowers. All revenue the protocol creates via these income streams is immediately converted to DAVOS USD-pegged stablecoins. Once converted, it is released back to investors and liquidity providers to allow them to benefit from this liquidity ecosystem.

Extra earning opportunities are available for DAVOS holders on Uniswap, QuickSwap

Since Davos Protocol (DAVOS) is integrated into the global dApps ecosystem, its customers can stake their DAVOS tokens using mainstream third-party applications. Namely, DAVOS-based pools are activated on Uniswap, a large Ethereum-based DEX, and QuickSwap, its Polygon-based analog.

Besides conservative staking modules, DAVOS holders can inject liquidity in more aggressive passive income products with increased rewards calculated in various LP tokens.

Then, LP tokens can also be restaked in the most risky programs. As such, DAVOS unlocks numerous opportunities to investors with various strategies and various styles of asset management.

Davos Protocol (DAVOS) uses all benefits of the modern proof-of-Stake (PoS) ecosystem to give its customers access to all popular passive income solutions from low-risk to high-risk ones.

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (, Monoreto, Attic Lab etc.)