🛡️Stability Pool

What is Stability Pool?

The Stability Pool provides liquidity to repay the debt of liquidated troves, ensuring that the total zbrUSD supply remains fully over-backed.

When a Trove is liquidated, an amount of zbrUSD equal to its remaining debt is burned from the Stability Pool's balance to repay that debt. The entire collateral from the liquidated trove is then transferred to the Stability Pool.

The Stability Pool is funded by users depositing zbrUSD into it, known as Stability Providers. Over time, Stability Providers lose a proportional share of their zbrUSD deposits while gaining a proportional share of the liquidated collateral.

However, since Vaults are typically liquidated just below a 115% collateral ratio, Stability Providers are expected to receive collateral worth more than the debt they repay.

Why should I be a Stability Provider?

Here is a summary of the benefits of depositing zbrUSD into the Stability Pool:

• Liquidation gains - As a Stability Provider, you receive a portion of these liquidation gains. The more zbrUSD you deposit, the larger your share of these gains.

• Earn rewards - Stability Providers receive rewards in the form of esZETRA tokens, the governance token of the system.

• Support the system - By depositing zbrUSD, you are providing stability to the system and helping maintain zbrUSD's peg to $1. This supports the overall health of the protocol.

In general, depositing zbrUSD into the Stability Pool can be a good way to earn rewards from participating in the system.

How can I benefit as a Stability Provider from liquidations?

Since liquidations happen when the collateral ratio drops just below 150%, you will likely make a profit whenever a Trove is liquidated.

How do I benefit as a Stability Provider from participants rewards?

To benefit from participants rewards as a Stability Provider, first you need to open a Trove account. Then, mint zbrUSD and deposit that into the Stability Pool. Once you make your deposit, you will immediately start earning a reward (in esZEBRA) in proportion to your deposit.

esZEBRA reward is calculated based on the rewards schedule. The longer you provide stability and the more zbrUSD you deposit, the more esZEBRA tokens you will earn as rewards.

At any time, you can withdraw the rewards you have accumulated so far to your Ethereum address.

How can I withdraw my deposit and rewards?

Generally speaking, you can take out the zbrUSD deposited into the Stability Pool or your rewards directly in the app at any moment. There is no minimum period that the funds must remain.

However, withdrawals are briefly halted whenever there are Troves with collateral ratios under 115% that have not yet been liquidated.

Is there any chance to lose money being a Stability Provider?

While liquidations typically happen when the collateral ratio is well above 100%, liquidations below 100% can only occur during flash crashes or due to oracle failures. In this scenario, you could lose money as the collateral gained will be less than the deposit reduced.

If zbrUSD is trading above $1, liquidations may become unprofitable for Stability Providers even at collateral ratios higher than 100%. However, this loss is hypothetical since zbrUSD is expected to return to $1 peg, so the "loss" only materializes if you had withdrawn and sold the zbrUSD at above $1.

Please note that although the system is originated from Liquity and is diligently audited, losses for users due to a hack or bug can never be fully ruled out.

What happens if the Stability Pool is empty when liquidations occur?

When the Stability Pool has no funds, the system uses a backup liquidation method called redistribution. In this situation, the system redistributes the debt and collateral from liquidated Troves to all the remaining Troves. The debt and collateral are redistributed proportionally based on how much collateral each recipient Trove has.