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Aurelius Finance

Aurelius aUSD – Bootstrapping the Mantle DeFi Economy

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Unleashing the Power of aUSD

This article delves into the intricate mechanics behind aUSD, exploring $1 MNT can generate between $2.45 and $4.40+ in network value on Mantle through various financial strategies. 

The Building Blocks

At the heart of Aurelius’s system is aUSD, minted through over-collateralized loans. Here’s how it breaks down: For every $1 MNT deposited in a CDP (collateralized debt position), $0.45 aUSD is minted (based on current collateralization ratios). This stablecoin is backed by the value of MNT (or other assets), ensuring stability and trust in the system.

This means that each $1 MNT generates a minimum of $1.45 in value for Mantle: $1 in the CDP and $0.45 aUSD. However, the actual value can be significantly higher when incorporating additional strategies.

Aurelius then rehypothecates CDP collateral to the lending market to earn yield which funds aUSD yield, meaning the $1 MNT of collateral for aUSD also supplies up to $1 MNT to the lending market.

Advanced Strategies

Aurelius’s system allows for advanced strategies that can further amplify the value derived from each $1 MNT:
  1. Liquidity Provisioning (LPing): When users provide liquidity, for instance, in an aUSD-USDT pair, an additional $0.45 of counter-asset can be committed. This effectively raises the value contribution of MNT in the system.
  2. Users borrowing rehypothecated collateral in the Lending Markets: Should a user want to borrow the supplied MNT collateral they will need to create a new over-collateralized loan. As an example, a user borrowing MNT at 50% LTV maintaining a 1.5 Health Ratio would depost $1 of collateral to borrow $0.50 MNT

With its over-collateralization strategy, every minted aUSD unlocks significant network value on Mantle.

Calculating the Total Value

To summarize, the value generated from each $1 MNT can be broken down as follows:

Base Value:

  • $1 in the CDP
  • $0.45 aUSD
  • Up to $1 in the lending market

Further Value through Advanced Strategies:

  • $0.45 of counter-assets (if LPing)
  • Additional $1.50 from users borrowing
Combining these elements, the total value can range from $2.45 to $4.40 for every $1 MNT, depending on the strategies employed. Aurelius accepts a variety of assets including MNT, ETH, mETH, USDC & USDT and can employ the same strategy to unlock and maximize capital.

Conclusion

Aurelius’ aUSD stablecoin offers a decentralized alternative to the likes of USDT and USDe, with as little counterparty risk as possible.. aUSD generates its own intrinsic and scalable yield, and it does so transparently and sustainably. Unlike traditional stablecoins, aUSD is intricately designed to create substantial value for Mantle. With its over-collateralization strategy, every minted aUSD unlocks significant network value.

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