FAQ

1. What do you do?

Stable Jack V1 divides SAVAX collateral into two products. The first product is called aUSD, a decentralized and fully-collateralized yield-bearing stablecoin. The second product is xAVAX, a volatile AVAX token. Users can supply USDT, USDC, AVAX, or sAVAX to mint either one (all deposits are zapped into xAVAX before deposit).

2. Can I get sAVAX back out again?

Yes! Every aUSD or xAVAX token is instantly redeemable for sAVAX at any time, in the amount of its current NAV.

3. What is NAV?

NAV is net asset value. It’s the current value, as determined by the protocol, of xAVAX or aUSD. You can mint or redeem xAVAX or aUSD for their respective NAVs. The protocol always accepts aUSD at a $1 value.

4. Why would I want aUSD?

• No exposure to counter-party risks: aUSD is a decentralized stablecoin that has no exposure to TradFi and is an Avalanche native stablecoin that is anchored by the AVAX economy.

• Yield-bearing: aUSD is a yield-bearing stablecoin that can generate native LST yield for the depositors in the Rebalance Pool, which will range around 12-15%.

• Peg stability: Even if the protocol fails, aUSD will be pegged to AVAX so that users won’t lose their investments.

• No borrowing cost: Compared to CDP models, users do not borrow stablecoin, so there is no borrowing cost.

• No liquidation risk of the collateral: As the users do not open a collateralized debt position, there is no liquidation risk for the collateral.

5. Why would I want xAVAX?

• Leverage AVAX position: xAVAX typically offers leverage levels between 1 to 4 times under normal circumstances, and users can easily monitor the leverage ratio in real time.

• Extremely low liquidation risk: Traditional perpetual contracts carry inherent liquidation risks, however, the liquidation risk of xAVAX is almost impossible as the CR of the protocol has to be lower than 100%.

• No funding cost: Traditional perpetual contracts can be costly, especially for long-term holders. In contrast, xAVAX has zero funding costs.

• Bullish on AVAX: xAVAX is an appealing option for those with a bullish outlook on AVAX and seeking long-term exposure.

• DeFi compatibility: xAVAX is a DeFi-compatible product that can be used in DeFi activities to further benefit from the token such as LPing, yield farming, and being used as collateral.

• Not affected by short-term price volatility: Most of the time sudden liquidations happen due to market maker speculation of upside or downside wicks. However, this can’t happen in the case of xAVAX.

6. What risks am I taking when I hold aUSD/xAVAX?

Apart from smart contract and oracle risk, which are common to nearly all DeFi protocols, the main risk for the protocol is an extreme outlier rapid AVAX price drop which is larger than the ability of the currently minted xAVAX to absorb. In that case, xAVAX price would go to zero (sort of like a liquidation) and aUSD would lose its stability, reverting to 1:1 AVAX price movements.

The protocol has extensive and thoughtful risk management systems to prevent this from happening.

7. What’s the Rebalance Pool?

The Rebalance pool is a farming vault for aUSD that earns high yields sourced from the staking yields of the reserve. aUSD in this vault can be automatically redeemed into sAVAX if the amount of aUSD minted ever gets too high compared to xAVAX. When this operation is needed, the protocol redeems only as much aUSD as necessary to return the protocol to stability, with aUSD sourced proportionally from all depositors. Two important notes:

Note 1: Until it is claimed, withdrawal-requested aUSD earns no yield but may still be used for redemptions

Note 2: Users can deposit aUSD into the Rebalance Pool to earn high sAVAX yields and periodically DCA into sAVAX.

8. How much does it cost?

The protocol charges very small minting and redemption fees. Those can be avoided by swapping in and out on secondary and some fees are waived in certain circumstances.

Aside from that, users do not pay any cost. Protocol revenue and stability services come from staking yields earned by sAVAX in the reserve.

9. Is aUSD an algorihtmic stablecoin?

Not at all! We hate algorithmic stablecoins. We built a new crypto-backed stablecoin that improves CDP models in 2 categories: A) Scalability of the protocol B) Capital efficiency for the user We are not an algorithmic stablecoin like Luna's UST: 1. There is no endogenous collateral like LUNA for UST 2. No protocol token is involved in any burning or minting mechanism unlike Terra's LUNA 3. We offer real yield with AVAX LSTs unlike LUNA 4. The protocol assumes delta risk for aUSD unlike Terra's UST