OADA 🟣 and sOADA 🟢
A Two-Tranche token system
Last updated
A Two-Tranche token system
Last updated
The system splits ADA into two fundamental token components: OADA and sOADA.
OADA is a stablecoin pegged to ADA that does not provide any staking rewards or governance capabilities. On the other hand, sOADA is an un-pegged token but is the beneficiary of all yield generated by the OADA system.
Users can freely mint OADA 1:1 with ADA at any time. OADA can be traded, used to provide liquidity, used as collateral for loans, and more within the Cardano ecosystem - just as ADA can be. If a user wants to convert OADA back to ADA, he must swap it on the OADA/ADA stableswap on Splash. There is no direct redemption mechanism. This is done to more fairly price the cost of exiting the system with slippage rather than tiered fees.
Users can stake their OADA to receive sOADA. Like OADA, sOADA can be used freely across Cardano DeFi but is also the benefactor of all profits generated by system. As these profits accrue, yield is auto-compounded and the exchange rate of sOADA back to OADA will increase. Users can unstake their sOADA freely at any time.
OADA 🟣
f6099832f9563e4cf59602b3351c3c5a8a7dda2d44575ef69b82cf8d
sOADA 🟢
02a574e2f048e288e2a77f48872bf8ffd61d73f9476ac5a83601610b
OADA maintains its peg within a one percent range (0.99-1.01). The system accomplishes this with the , which manages the OADA/ADA stableswap exchange rate on Splash. If OADA rises above peg, OADA will be minted and sold into the pool to balance the peg lower. If OADA falls below peg, the system will use ADA reserves to buy OADA and rebalance the pool higher. Both of these actions generate profits for the system.
If users want to stake their OADA, but the system’s staking capacity has been filled, users can queue to stake once the cap has been raised. This capacity-raising process is managed by members of the .
Users should be aware that sOADA absorbs any potential losses should the system encounter unforeseen issues or market anomalies. Under normal operations, system losses are unlikely to occur due to the OADA system's design, which emphasizes minimized risk exposure. The strategies employed by AMOs are parameterized to limit exposure to smart contract risks and low-level lending risks, ensuring that the probability of losses is minimized. System risks are elaborated on further in the .
