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Raman Finance

Introduction

Raman Finance is a new innovative synthetic asset protocol for stablecoins built on the new LSD-backed stables protocol, which is free of any liquidation risk and is capable of progressively increasing capital efficiency and increasing returns for all users on top of the existing LSD-backed stables protocol ecosystem.

Background

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LSDfi stands for "Liquid Staking DeFi". It refers to a category of decentralized finance (DeFi) protocols that are built on top of liquid staking derivatives (LSDs). These protocols offer additional yield opportunities to LSD holders, allowing them to maximize their returns while retaining the liquidity of their staked assets. Due to the updates of ETH2.0, stETH holders can now earn staking rewards, which has opened up the possibility of earning additional income for LSD stablecoins as well.

LSDfi protocols had experienced a rapid increase in Total Value Locked (TVL) over the previous months. The cumulative TVL in top LSDfi protocols had crossed the US$400 million mark and had more than doubled within a month. New LSD protocols such as Lybra and Raft have provided users with this opportunity, resulting in a significant influx of TVL in a short period of time. Among them, Lybra has the largest TVL, which has now reached  $ 189M. Raft has grown the fastest, with a TVL of $ 59m in less than a month. This can be considered as one of the main reasons for the recent rapid growth of LSD TVL. And this growth shows no sign of stopping, which means that this track holds great growth potential.

How it will change the existing landscape

Raman foresees potential problems that will arise with the current development of LSDfi and has prepared solutions in advance.

The stablecoins of different LSD-backed stables protocols cannot be used universally. As the competition in this track intensifies, there will be many dozens of new LSD-backed stables protocols in the near future, different protocols have their own advantages, and the fierce competition will continue for some time, and there will even be a situation of burning subsidies to grab market share. When it is foreseeable, it will lead to a certain degree of liquidity fragmentation.

With the help of Raman Finance, it is possible to aggregate the liquidity of all LSD-backed stables, avoiding the loss of efficiency caused by liquidity fragmentation, and maintaining the existing revenue of all participants in the existing ecosystem without introducing any additional risk. Raman Finance reduces the friction caused by the competition between LSD-backed stables protocols, so it is just bringing additional cake for everyone.

Users can simply use their LSD-backed stables supported by the Raman Finance protocol to mint raUSD at a 50% conversion rate, which gives them not only all the rewards of the original LSD-backed stables protocol but also additional rewards of the Raman Finance protocol. Since there is no liquidation risk with Raman, the user can use raUSD for anything else with no worry.

A new and unique price anchoring mechanism of raUSD guarantees that 1 raUSD can be converted into 1 USD and that the price of raUSD will remain stable at 1 USD in the long run.

Why Raman Finance?

  • Improved capital efficiency.

  • No liquidation risk.

  • Improves user revenue.

  • Promotes healthy development of all LSD-backed stables protocol.

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