How Stable Jack Creates New Demand: The BENQI Case Study

Stable Jack is a yield, volatility, and points trading marketplace built on top of other LST/LRTs, lending markets, DEXs, and any yield-bearing assets.

This means that Stable Jack utilizes the assets created by these protocols to offer YT (Yield Token) and VT (Volatility Token). In the first three months after launch, the protocol amassed $7 million in Total Value Locked (TVL) while exclusively accepting BENQI's liquid staking token, $sAVAX, as collateral.

The protocol achieved consistent growth since the beginning as the number of $AVAX deposited in the protocol has been consistently growing even though the $AVAX price has been mostly dropping due to market conditions.

In this article, we will explore how Stable Jack droves new demand for BENQI by leveraging $sAVAX as collateral

Since the launch of Stable Jack, the deposited amounts of assets are:

• $3,613,348 worth of $AVAX

• $3,604,549 worth of $sAVAX

• $938,918 worth of $USDC

• $536,900 worth of $USDT

What does this data show?

Stable Jack allows users to deposit $USDC, $USDT, $AVAX, and $sAVAX to mint $aUSD and $xAVAX. However, when someone deposits $USDC, $USDT, or $AVAX, those assets are converted into $sAVAX using Yield Yak's Yak Swap. Additionally, if swapping is more expensive than minting, Yak Swap directly mints $sAVAX for the protocol.

To date, Stable Jack has created over $5 million in demand for $sAVAX and has become the 3rd largest holder of $sAVAX.

What does it mean for protocols?

For LST/LRT protocols: New use cases are essential to gain traction in the increasingly competitive LST/LRT space. To stand out, LST/LRT protocols must partner with Stable Jack to enable new DeFi primitives to be built on top of LST/LRT assets.

By utilizing Stable Jack, LST/LRT protocols can offer investors leveraged long positions on their assets without liquidation risk or allow them to earn leveraged yields on their assets.

For DEXs: AMM models have been revolutionary, but impermanent loss and LP profitability remain major concerns for DEXs. To address this, most relied on token incentives, which may not be sustainable in the long run. Stable Jack can provide fixed yields to LPs via YT or offer leveraged exposure to LP tokens, effectively converting LP tokens into Index Tokens.

While impermanent loss was once a major issue for LPs, Stable Jack enables DEXs to tackle this pain point, helping them gain a competitive edge in the DEX ecosystem.

For Lending markets: Variable yields have always been a concern for LPs. Since many lending projects offer similar value propositions, liquidity costs are consistently high for protocols. Stable Jack can address this by offering fixed yields via YT or leveraged yield exposure to LPs in lending markets.

For Yield-Bearing assets: Yield-bearing assets such as $sUSDe, $sDAI, and $sFRAX are well-suited for Stable Jack's fixed-yield products, which can increase demand for these assets due to the predictability of returns.

Conclusion

Yield and volatility stripping allow us to offer new types of products that have never been seen before in DeFi.

We will drive significant demand for our partner protocols as we continue to grow!