Backing
How does CAMP deal with USDx inflows to the protocol?
USDx inflows to the protocol are swapped into USDca via external AMM pools. Market makers can then add stETH to the CAMP protocol for USDca to then sell on AMM pools to bring external prices back in line. This allows users to easily and efficiently access USDca with stablecoin assets.
Is stETH the only collateral enabled?
No, whitelisted users can mint with USDT, USDC, stETH, WETH, WBETH and mETH. BTC and ETH are also assets backing USDca today.
How does CAMP use exchange staked ETH products?
Exchange staked ETH products will be used on their native exchanges if CAMP reaches potential collateral/margin limits on stETH set by exchanges when maintaining hedged positions. In that instance, some USD or ETH inflows will be converted into the exchange’s staked ETH token to use for the hedge.
Are there additional risks with exchange staked ETH products?
From a liquidity standpoint, there is little difference between an exchanges own staked ETH product vs stETH, as both can be redeemed 1:1 and an exchange will likely be even quicker to satisfy redemptions back into ETH, as Lido in some scenarios would be dependent on the Ethereum validator exit queue in an event where users redeem stETH for ETH. Centralized exchanges also have excess ETH on hand to satisfy any exchange staked ETH redemption requests. CAMP’s use of off-exchange custody solutions ensures that no backing is left on the exchange itself and is not directly exposed to any idiosyncratic events on that exchange.
What are the risks around withdrawal of stETH or exchange ETH?
Lido and exchanges offer 1:1 redemption of stETH into ETH, but there is a chance everyone rushes to unstake their staked ETH and the exit queue builds up. At this stage, protocols reliant on stETH will have to take a decision to swap the staked token into ETH at a discount immediately, or wait potentially several days to receive ETH at a 1:1 basis. This is something that would affect most DeFi protocols and won’t be as a result of design choices CAMP has made.
What happens if stETH vs ETH basis widens?
If stETH vs ETH discount widens, Lido will still satisfy redemptions of stETH at a 1:1 basis to ETH. The 1:1 redemptions will be at the mercy of an exit queue which can range anywhere from a few hours to a few days. If the price of stETH vs ETH widens, CAMP is not typically running any leverage on short positions and therefore liquidation risk on this diverging price is limited.
Are stETH and ETH the redeemable assets on mint/ redeem?
Yes, users will have the choice of redeeming ETH or stETH.
How do you withdraw from exchange native staked ETH to ETH?
Either via Curve pools if trading close to peg, or via exchange to ensure 1:1 redemption.
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