Executive Summary

The StaikaFi Protocol is an innovative collateralised debt position (CDP) protocol designed to facilitate the seamless minting of SUSD, an inflation-proof omnichain stablecoin, by leveraging Liquid Staking Tokens (LSTs). The protocol aims to address the challenges faced by traditional CDPs in decentralised finance (DeFi) by incorporating an unbiased monetary policy and fair borrowing rates, thereby enhancing user protection and promoting broader DeFi adoption. The StaikaFi Protocol introduces the concept of collateralising LSTs, allowing users to generate SUSD as a stablecoin through the CDP mechanism. By collateralising LSTs, users can access liquidity and benefit from the value appreciation of their staked assets. This innovative approach provides users with an attractive opportunity to maintain their participation in proof-of-stake networks while still unlocking the potential of their staked tokens.

One key distinguishing feature of the StaikaFi Protocol is its borrowing rate mechanism. Unlike other CDP protocols that provide zero or near-zero borrowing costs, the StaikaFi Protocol aligns the borrowing rate with real-world factors, striking a balance between the Consumer Price Index (CPI) Annual Change and the Central Banks Rate. This ensures fair borrowing rates and addresses the challenges of low-yield stablecoins in the current DeFi landscape. The StaikaFi Protocol incorporates liquidity gauges, which play a vital role in maintaining ample liquidity and driving active involvement. The utilisation of these gauges provides the ability to effectively redirect the stablecoin yield in a versatile and practical way, enabling it to be allocated towards various initiatives such as the SUSD Redistribution Rate (SRR) and liquidity incentives within liquidity pools. This enhancement allows for greater control and adaptability in managing the distribution of stablecoin yield, optimising the protocol’s overall performance. In addition, the protocol employs borrowing gauges that offer tailored STAIKA borrowing incentives for different collateral types, with a primary emphasis on LSTs and LST Liquidity Pool Tokens (LPTs). The governance of these gauges is facilitated by the STAIKA token, serving as the protocol’s governance token. Particularly, STAIKA holders who lock their tokens in exchange for veSTAIKA are not just participants but architects, able to influence the allocation of STAIKA emissions concerning the relative liquidity, lending, and borrowing gauges.

By combining the benefits of LST collateralisation, an unbiased monetary policy, and community governance, the StaikaFi Protocol aims to establish itself as a leading CDP protocol in the DeFi ecosystem. Its unique approach offers users a more inclusive and robust system for generating stablecoins while minimising the risks associated with inflation and unstable borrowing rates.