How is monUSD backed?

Monarch enables users to generate MonUSD through two distinct methods:

Collateralized Debt Position (CDP): users can mint monUSD by depositing MON. Since CDPs are overcollateralized at 120%, the dollar amount of monUSD that can be generated through CDPs is always lower than the dollar value of the token posted as collateral. Users pay an interest rate on the generated monUSD as long as they keep their Position open. The Position can be closed by the user repaying its debt in monUSD or liquidated whenever the dollar value of the collateral token falls below the dollar value of the monUSD generated by the user.
Protocol Reserve (Mainnet only): users can mint monUSD by depositing USDC at a 1:1 ratio, as long as the USDC price is higher than a certain value. Since this is not a debt position, users do not pay any fee or interest rate to generate monUSD through protocol reserve, they do not have to repay monUSD and they are not susceptible to liquidations.

Last updated 21 days ago

Monarch enables users to generate MonUSD through two distinct methods:

Collateralized Debt Position (CDP): users can mint monUSD by depositing MON. Since CDPs are overcollateralized at 120%, the dollar amount of monUSD that can be generated through CDPs is always lower than the dollar value of the token posted as collateral. Users pay an interest rate on the generated monUSD as long as they keep their Position open. The Position can be closed by the user repaying its debt in monUSD or liquidated whenever the dollar value of the collateral token falls below the dollar value of the monUSD generated by the user.
Protocol Reserve (Mainnet only): users can mint monUSD by depositing USDC at a 1:1 ratio, as long as the USDC price is higher than a certain value. Since this is not a debt position, users do not pay any fee or interest rate to generate monUSD through protocol reserve, they do not have to repay monUSD and they are not susceptible to liquidations.

Last updated 21 days ago