Main motivations behind building Convergent?



The stablecoin trilemma encompasses capital efficiency, peg stability, and decentralization. Centralized stablecoins like USDC are attractive to many due to their 1:1 backing, ensuring 0 losses in capital efficiency but compromising decentralization. Our aim is to cater to users and DAOs prioritizing decentralization, immutability and censorship resistance - while experiencing minimal loss in capital efficiency compared to centralized alternatives. Unlike other "decentralized" stablecoins like DAI and FRAX that are partially backed by USDC / USDC LP positions, USV is fully backed by decentralized assets with 0 censorship risks.

Is this UST/LUNA 2.0?

No. The stability of UST relied on the use of endogenous assets to maintain its peg. Their governance token, LUNA was designed and issued to act as the backing asset for UST, creating a circular reflexivity where LUNA essentially alchemized value from itself. The volatility of UST, which was absorbed by LUNA, proved to be unsustainable in the long term, especially during market downturns. For instance, if the price of LUNA did not scale sufficiently with UST's market cap, the stablecoin would become less and less "backed" by LUNA, which is exactly what happened. As a result, there was a shift towards incorporating exogenous assets, such as BTC, to partially back UST. However, these adjustments alone were not enough to prevent their eventual demise.

In contrast, Convergent operates using an entirely different approach. We rely entirely on exogenous assets, specifically JitoSOL, as collateral within our system. These collateral assets are valued and monitored using the Pyth JITOSOL:USD price feed, which helps facilitate near instant and gas efficient liquidations whenever a position falls below the minimum collateral ratio. Additionally, Convergent is designed to be always over-collateralized that closely references the time-tested design seen in Ethereum-based stablecoins like DAI and LQTY. This ensures that there is more than one dollar of SOL or JitoSOL backing the stablecoin for every dollar of USV in circulation. It's important to note that our protocol does not rely on our utility token, CVGT, for backing USV; it solely serves for revenue sharing via staking and governance participation purposes. Unlike LUNA, the price of CVGT will have 0 impact on the peg of USV and system solvency of the protocol.

Why mint USV with Convergent?

Borrowing with Convergent is interest-free and capital-efficient. Instead of selling your SOL in exchange for liquid funds, Convergent allows you to lock up your SOL (maintain long SOL exposure and earn staking + MEV yield), borrow against the collateral to withdraw USV, and settle your loan later. Minted USV can be deposited into the Nexus to earn a share of liqudation gains and CVGT rewards continuously. Note: our protocol takes 0 haircut on the staking yield from Jito.

How can I earn CVGT?

Pre TGE: FRAGMENTS Post TGE: Nexus depositors - CVGT tokens are dynamically emitted to incentivizeand reward users that deposit USV into the Nexus.

What can you do with CVGT?

The CVGT token can be staked to earn a pro-rata share of protocol fees, which include both issuance and redemption fees. We will activate the protocol fee sharing feature when CVGT TGEs. From day one, we will not accrue any fees to the treasury. To illustrate, if there are 1000 CVGT tokens staked and you staked 100 of them, you will receive 10% of the protocol fees.

It says Protocol v1, does that mean v2 is planned?

Yes. We are focused on shipping out v1 to the market, which is designed with time-tested specs. Planned v2 features further improves capital efficiency and utility of USV but require additional time for testing and audits.

What are 「 A G E N T S 」? Why do you need a NFT Collection?

Read about AGENTS here

The Genesis Collection will reward early supporter of our project as we introduce Convergent to the Solana NFT + DeFi ecosystem. In the long term, holders of AGENTS will not only gain exposure to FRAGMENTS and future offerings, but also integration with our dApp, including protocol fees sharing via staking.

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