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Amara v2 Doc
Amara v2 refers specifically to the second innovative version of AmaraLend.

an Elastic Monetary Market with Creative Auto Compound Lending System

1 Amara Lending V2 Introduction

1.1 What is Amara?

Amara Finance is the first decentralized auto compounded borrowing protocol deployed on Moonriver and Binance Smart Chain that allows users to draw interest-free loans against qualified LP tokens used as collateral. Loans are paid out in USDA (a USD pegged stablecoin) and need to maintain a certain collateral ratio for different collaterals respectively.
Currently, a lot of assets have locked in capital that can't be put to further use. Some protocols like Abracadabra offer an opportunity to release liquidity of them, but the volume of these assets is too small, in Defi world, LP tokens are even more common than any other tokens, so Amara gives user opportunity to mint stable coins while getting auto-compounded LP mining reward.
Amara Lending v2, aspired by Abracadabra and Kashi Lending Technology, designs a system that allows users to borrow USDA while getting auto-compounded LP reward.
Each lending market is isolated with others, and users are allowed to adjust their risk tolerance according to the collateral they decide to use.

1.2 What is the motivation behind Amara?

Stable-value assets are an essential building block for each network’s applications and have grown to represent tens of billions of dollars in value.
However, the vast majority of this value is in the form of fiat-collateralized stablecoins like Tether and USDC. Decentralized stablecoins like DAI and LUSD make up only a small portion of the total stablecoin supply, meaning the vast majority of stablecoins are centralized.
In the Defi 2.0 Era, The Abracadabra’s MIM stablecoin uses interest-bearing tokens as collateral to borrow a USD pegged stablecoin, but ibTokens total value is so small compared with the large value of all the LP tokens, so the MIM stable coin is not as scalable as other stable coins.
Amara addresses this by creating a more capital efficient and user-friendly way to borrow stablecoins. Using LP token as collateral, Amara platform auto compound to give users high APY and allow users to mint Mar(Amara USD) simultaneously.

1.3 LP Autocompound Lending System

At present, DeFi has entered a period of slow growth. Many projects hope to improve the DeFi protocol from the utilization of funds, such as abracadabra. The most common and largest token in the Defi world is the LP token, apart from the auto compounded pool, there is no way to effectively use the LP token, and the emergence of Amara is to maximize the utilization efficiency of LP. Through multi-chain deployment, it can bring more increase volume to DeFi.
Amara v2 creatively uses LP as collateral, different from other protocols, the collaterals used has their Liquidity mining pool on DEX, such as Pancakeswap, Solarbeam etc. Take USDT-BUSD LP as example, users can get a reward of 10% on Pancakeswap, while on Amara v2, users can make an auto compounded profit of 15% and borrow USDA at a collateral rate of 120%.
The USDA is provided by users who own USDA and stake their USDA to Amara Lending platform, while the LP holders can borrow USDA, they give the interest rate using their auto compounded rewards. The creative product of Amara V2 will empower the usage of USDA and support the value on DeFi side.

1.4 Depositing and Borrowing

Head over to Amaralend.io and click on LP Market. The borrow section of the website displays a variety of LP Tokens that can be used as collateral. Here are some examples:
Across the top, you can see:
  • Assets: the type of LP assets that can be used as collateral
  • Total USDA Borrowed: total USDA that has been borrowed in the market
  • APY: the autocompounded LP mining reward
  • Liquidation Fee: the liquidation fee for certain position
  • TVL: total LP value locked
To borrow USDA, simply click anywhere in the frame of the component you want to use as collateral. Take MARA-USDT LP as example.
At Deposit Collateral Frame: First, decide how much LP will be used as collateral. Then decide how much USDA will be borrowed by either typing in the numbers or using the percentage buttons below. The light blue SAFE indicator will help warn us if we have put settings that are over risky. The LIQUIDATION PRICE will display the component price at which we can be flagged for liquidations.
At My Open Position Frame, you can manage your collateral and your borrowed USDA this Frame, it contains dynamic information at this specific position. If you open a position using a different component these numbers will adjust to that isolated market. If you adjust your position, these numbers will adjust accordingly. Please note that every time you edit your position (add more collateral or borrow more USDA) these numbers will adjust accordingly. The liquidation price stated here is the one that will decide when your total position gets liquidated or not.
The same is with Reapy Interface
The following describe parameter details in My Open Position Frame
  • Deposit collateral: LP amount to stake
  • Borrow USDA: After deposit LP token, the amount of USDA that can be borrowed
  • Your Balance: The amount of LP and USDA in your wallet
  • Collateral Deposited: The amount of LP token that has been deposited
  • Collateral Value: The value of Collateral Deposited
  • Position APY: The auto-compounded APY of LP
  • Daily APY:The daily APY
  • USDA Amount: the USDA amount that has been borrowed
  • USDA Value Borrowed: the USDA value that has been borrowed
  • Expected Liquidation Price: The Expected Liquidation Price of LP token
  • Debt Ratio: the Borrowed USDA value/Collateral Value

1.5 One click Leveraged Yielding Positions

We developed a one-click UI that allows users to do leveraged Yielding Position for users to leverage their Reward
1.5.1 Leverage Positions
How the process works:
Take USDC-USDT LP as example, to open the leveraged position, users need to deposit the interest-bearing token they want to leverage. Amara allows withdrawing more USDA than it should be possible, as long as the collateral required is supplied to the position eventually, within the same transaction.
To better explain this, let's use the example of a user that wants to leverage his yvUSDT position:
  • Step 1 and 2 - The user selects the desired leverage, obtains the LP, and deposits them as collateral.
  • Step 3 - Given the selected leverage, the protocol borrows the respective amount of USDA
  • Step 4 - These USDA are swapped into USDT/USDC (current price peg and slippage play an important role here).
  • Step 5 - These USDT-USDC are deposited into target DEX to receive USDT-USDC LP
  • Step 6 - These LP tokens are deposited back into the Amara to collateralize the user's position.
This process can be visualized using the following infographic:
1.5.2 Deleverage Positions
How the process works:
Amara allows withdrawing collaterals even without repaying USDA, as long as the USDA required are supplied to the position eventually, within the same transaction. The process works the exact opposite as the "Leverage Yielding Transaction".
Step 1 - The user selects the desired amount of collaterals he wants to withdraw and the amount of USDA he wants to repay.
Step 2 - The protocol releases the user's collateral, in this case, USDT-USDC LP.
Step 3 - These LP tokens are then unstaked from the target DEX and get back to USDC/USDT
Step 4 - These USDT/USDC are swapped for USDA. (current price peg and slippage play an important role here).
Step 5 - These USDA tokens are deposited back into Amara to repay for the user's released collaterals.
Step 6 - The user receives whatever collaterals are left after these transactions, in this case, the value will be equal to the profit that the leveraged position has produced.
This process can be visualized using the following infographic:

1.6 Collateral Factor Table

Each asset in the Amara protocol has specific values related to their risk, which influences how they are collateralized. We have established a system that assess each kind of LP token:

2 Amara Stable Coin System(USDA)

2.1 USDA——a USD Pegged Stablecoin backed by MARA

USDA is a stablecoin minted by burning MARA, each USDA needs to burn $1 MARA and can get $1 MARA when redeemed. The ambition of Amara ecosystem is to build a widely used and price stable system to solve the problem of high volatility of cryptocurrency, and along with the Amara Link, Amara Lend and Amara Pay to widely apply USDA in both DeFi and CeFi.
Amara uses an elastic monetary policy to maintain USDA stable at $1. However, price-stable does not mean the success of a stablecoin, Amara empower USDA with the total DeFi and CeFi ecosystem, using creative auto compounded LP Lending system to absorb DeFi users and integrating Amara Pay for real world usage. Our belief is that while an elastic monetary policy is the solution to the stability problem, an efficient fiscal policy can drive adoption. In addition, Amara Protocol offers an effective governance and incentive system for long time users who want to participate and support our network.

2.2 Maintain Stability with Oracle

Since the price of USDA in secondary market is exogenous to the blockchain, the system need to get real time price through the price oracle like Chainlink to estimate the true price. Different kind of oracle will be used and averaged by different weight as defined to ensure the real time price.

2.3 Fees and cost of USDA

The voters play a foundational role in the security and stability of Amara. They provide their lock MARA and absorbing short-term volatility in USDA demand. The stability for minting USDA is the core of security and stability. The system achieve this by offering stable reward in all economic conditions. And the income of those long term voters can be rewarded in two ways:
  • Transaction fees: All USDA transactions pay a small fee varies from 0.1% to 0.5%, all this transaction fees will be rewarded back to the vote lock pool stakers, and this transaction fee is much cheaper than traditional payment channels
  • MARA Burn: When demand for USDA increases, the system mints USDA and ean MARA as reward. The system burns a portion of earned MARA, which provide value for long term stakers. The remaining portion of MARA Burn goes to the Treasury.
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Outline
an Elastic Monetary Market with Creative Auto Compound Lending System
1 Amara Lending V2 Introduction
2 Amara Stable Coin System(USDA)