LLTS AS A NEW COLLATERAL TYPE FOR STABLECOINS AND THE $MITO ASSET
A DEEP DIVE INTO STABLECOIN DESIGN
From a stablecoin protocol designer's perspective, one of the biggest challenges is finding a diversified and yield bearing source of collateral. The Liquid Liquidity Tokens (LLTs) from the Mitosis protocol are a perfect solution. The value of the $MITO asset is tied to this powerful B2B use case.
A MORE ROBUST AND YIELD BEARING COLLATERAL BASE
Let's analyze the real data of how this would work. A new, decentralized stablecoin could be designed to accept a basket of high quality LLTs from the @Mitosis Official protocol as its primary collateral. This would have two major advantages over existing models. First, the collateral would be highly diversified. It could be a basket of LLTs that represent dozens of different underlying LP positions, from stablecoin pairs to more volatile pairs. Second, the collateral would be natively yield bearing. The underlying LP positions are constantly earning trading fees, which generates a sustainable, real yield for the stablecoin's treasury.
This real yield could then be passed on to the stablecoin's holders. The platform governed by the #mito community provides the foundational collateral for this next generation of safer and more profitable stablecoins.