Harnessing the Power of Reward-Bearing Assets through DUSD
The introduction of reward-bearing assets has transformed the DeFi landscape, changing our perception of yield generation.
The Davos ecosystem was built around reward-bearing assets, serving as collateral for our stablecoin DUSD. Integrating these types of assets allows us to offer a differentiated stablecoin that provides novel opportunities for financial growth and stability for countless users.
Building on our previous exploration of reward-bearing assets, this article provides a step-by-step guide to minting DUSD using Liquid Staking Tokens (LSTs), Liquid Restaking Tokens (LRTs), and reward-bearing stablecoins. We'll also explore layered-reward strategies to further your DeFi experience.
Continuing the DeFi Journey
In our previous article, "Understanding Reward-Bearing Assets," we explored how these assets represent a paradigm shift in how value can be generated and sustained in DeFi.
Reward-bearing assets like Liquid Staking Tokens (LSTs), Liquid Restaking Tokens (LRTs), and reward-bearing stablecoins allow users to earn passive income while maintaining liquidity.
These assets are crucial for providing flexibility in investment strategies and improving DeFi’s composability.
Today, we will focus on practical applications—guiding you on how to mint DUSD and implement layered-reward strategies using these powerful tools.
Guide on How to Mint DUSD with LSTs, LRTs, and Reward-Bearing Assets
Step 1: Setting Up
Begin by accessing the Davos platform to start your DeFi journey.
- Visit the Davos dApp: Navigate to the Davos website and launch our dApp here.
- Connect Your Wallet: If you haven't already, connect your existing crypto wallet or create a new one directly on the platform. This step is crucial for accessing the protocol's features.
Step 2: Choosing and Understanding Reward-Bearing Assets
With your wallet connected, it's time to select and understand the reward-bearing assets you can use:
- Liquid Staking Tokens (LSTs): Tokens like Lido's stETH allow you to stake ETH while retaining liquidity. LSTs help you earn staking rewards without sacrificing flexibility.
- Liquid Restaking Tokens (LRTs): These tokens enable additional staking layers, letting you restake the original tokens for compounded rewards.
- Reward-Bearing Stablecoins: Stablecoins backed by reward-bearing assets, such as ionUSDC or vUSDC, offer stability with the added advantage of generating passive income.
Step 3: Minting DUSD with Reward-Bearing Assets
Minting DUSD with your selected reward-bearing assets on Davos is a straightforward process. Follow these steps to unlock the benefits of staking rewards while accessing stablecoin liquidity for diverse DeFi activities:
Access the Minting Interface: Navigate to the Mint Page on the Davos dApp.
Provide Collateral:
- Select Your Collateral: Choose the reward-bearing asset (LSTs, LRTs, or stablecoins) you wish to use as collateral. Press the "Mint" button for the chosen asset. Enter the Amount: Input a valid amount in the "Deposit Collateral" section of the Mint tab.
- Approve Transaction: Press the "Approve" button to authorize the transaction and complete the action in your connected wallet. This step allows Davos to interact with your chosen collateral.
- Deposit Collateral: After approval, press the "Deposit" button and confirm the transaction in your wallet to provide the collateral.
Mint DUSD:
- Complete the Transaction: Wait for the transaction to be completed on the blockchain network. This might take a few moments depending on network congestion.
- Confirm Success: Once the transaction is finalized, click "OK" to confirm the successful minting of DUSD.
By following these steps, you can effectively use your LSTs, LRTs, or reward-bearing stablecoins to mint DUSD. This process enables users to earn staking rewards while retaining stablecoin liquidity, which can be leveraged for various strategies and activities on Davos and the wider DeFi ecosystem.
Layered-Reward Strategies with Davos
Layered-reward strategies enhance DeFi returns by allowing you to leverage and reinvest assets for additional yield. Here's how you can implement these strategies using DUSD:
Step 1: Using DUSD for Further DeFi Strategies
After minting DUSD, explore the wide range of investment opportunities for further yield:
- Earn Page: Visit the Davos Earn Page to explore various DeFi strategies that utilize DUSD.
Step 2: Implementing a Layered-Reward Strategy
Maximize your returns with this step-by-step guide:
Acquire stETH: Obtain stETH through a trusted provider like Lido.
Mint DUSD: Use your stETH as collateral to mint DUSD on Davos.
Leverage DUSD: Reinvest your DUSD into other DeFi protocols to earn additional yield.
Dual-Layer Rewards
Benefit from dual-layer rewards: gain returns from both the original staking yield and additional DeFi strategy returns. This approach maximizes your earning potential, making your assets work harder for you.
Reaching New Heights with Davos
Congratulations! Now you are equipped with all the knowledge to mint DUSD and implement elaborated strategies using reward-bearing assets. Follow these steps to increase your bottom line, start compounding rewards and become eligible for airdrops by using DUSD on different protocols/networks.
We invite you to explore and leverage the full potential of reward-bearing assets with Davos, a platform designed to ennrich your DeFi experience and unlock new opportunities for growth.
Join the Davos community today and take the next step in your DeFi adventure! Discover and learn more by reading our blog and following us on Twitter (X).
