A Stablecoin That Pays You: Discover DUSD's Underlying Benefits
Following the 2017 bull run, stablecoins began emerging as a cornerstone of the industry. Providing stability in a market known for its volatility, stablecoins enabled investors to enter and exit the market easily.
However, not all stablecoins are created equal: DUSD, the stablecoin native to the Davos Protocol, offers something unique. Unlike traditional stablecoins, DUSD is designed with yield opportunities at its core, allowing users to maximize their earnings while maintaining liquidity.
This guide will walk you through the various ways DUSD can generate yield for you, from minting it with reward-bearing assets to staking and leveraging it across multiple DeFi platforms. By the end of the article, you'll have a clear roadmap on how to optimize your earnings with DUSD within the Davos ecosystem.
Earning Underlying Yield by Minting DUSD with Reward-Bearing Assets
Understanding Reward-Bearing Assets
Before diving into how to mint DUSD, it’s crucial to understand what reward-bearing assets are and why they are valuable in DeFi.
Reward-bearing assets are crypto assets that generate ongoing returns or rewards simply by holding them. These include Liquid Staking Tokens (LSTs), which represent staked assets that continue to earn staking rewards, Liquid Restaking Tokens (LRTs), which offer additional rewards through restaking mechanisms, or reward-bearing stablecoins such as sDAI or cUSDT.
By using these assets as collateral, you can mint DUSD, unlocking liquidity while still earning rewards from the underlying assets. This dual-earning potential makes DUSD a powerful tool in any blockchain-based investment strategy.
Learn more about Reward-Bearing Assets in our detailed guide.
How to Mint DUSD with Reward-Bearing Assets
Here’s a step-by-step guide to minting DUSD using your reward-bearing assets:
Step 1: Acquire Reward-Bearing Assets
First, you’ll need to obtain reward-bearing assets like LSTs or LRTs. These can be acquired through various DeFi platforms that support staking and restaking, like Lido or EtherFi.
Step 2: Connect to the Davos dApp Visit the Davos Protocol’s decentralized application (dApp) and connect your wallet. Make sure your reward-bearing assets are available in your wallet.
Step 3: Navigate to the Minting Section
Once connected, go to the minting section of the dApp. Here, you’ll find an interface that allows you to use your reward-bearing assets as collateral.
Step 4: Mint DUSD Input the amount of collateral you wish to use and mint DUSD. The platform will calculate the amount of DUSD you can mint based on the value of your collateral, maintaining a safe collateralization ratio. Once minted, your DUSD is ready for use, and your reward-bearing assets will continue to generate rewards in the background.
Staking DUSD in the Savings Rate for Further Rewards
Overview of the DUSD Savings Rate
The DUSD Savings Rate is a feature within the Davos Protocol that offers stable and predictable returns by staking your DUSD.
Unlike other DeFi staking options, which can fluctuate based on market conditions, the Savings Rate provides a reliable way to grow your assets over time, similar to a high-yield savings account in traditional finance but with potentially higher returns.
Explore all the particularities of the DUSD Savings Rate in our blog post.
How to Stake DUSD in the Savings Rate
Follow these steps to stake your DUSD and start earning:
Step 1: Navigate to the Savings Rate Section On the Davos dApp, go to the Savings Rate section. Here, you’ll find the current interest rate and other relevant details.
Step 2: Stake Your Minted DUSD Choose the amount of DUSD you wish to stake and confirm the transaction. Your staked DUSD will begin earning interest immediately.
Step 3: Monitor and Reinvest or Withdraw You can monitor your earnings directly within the dApp. Depending on your financial goals, you can choose to reinvest your earnings to compound your returns or withdraw them as needed.
Leveraging DUSD Through DeFi Integrations for Additional Rewards
Exploring DeFi Integrations with DUSD
One of the key strengths of DUSD is its integration with various DeFi platforms. By leveraging these integrations, you can access additional earning opportunities beyond the Davos ecosystem. Whether it’s yield farming, liquidity pools, eligibility for airdrops, or other DeFi strategies, DUSD provides flexibility and profitability in a broad range of environments.
How to Leverage DUSD on the Earn Page
To make the most of DUSD’s DeFi integrations, follow these steps:
Step 1: Access the Earn Page on the Davos dApp Head to the DeFi page within the Davos dApp. This page aggregates all the available DeFi integrations where you can use DUSD.
Step 2: Select Suitable Yield Farming or Liquidity Pool Opportunities Browse through the list of available opportunities. Choose one that aligns with your risk tolerance and financial goals. Each option will show potential yields and the associated DeFi platforms. Your DUSD, is on a different chain? Don’t worry, use our gasless bridge and move your DUSD around with ease!
Step 3: Provide Liquidity or Participate in Yield Farming Once you’ve chosen an opportunity, allocate your DUSD to it. This could involve providing liquidity to a pool or participating in a yield-farming.
Step 4: Explore Other DeFi Strategies Keep an eye on new opportunities as they arise. The DeFi landscape is dynamic, and new ways to leverage your DUSD for additional rewards are constantly emerging.
The Power of DUSD in Generating Income
DUSD is not just another stablecoin; it’s a gateway to earning steady and potentially significant returns through various avenues in DeFi. By minting DUSD with reward-bearing assets, staking it in the Savings Rate, and leveraging it across multiple DeFi platforms, you can build a robust and diversified income stream.
Ready to start maximizing your earnings with DUSD? Join the Davos community today and discover the full range of benefits this innovative stablecoin offers.
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