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Buy and Stake Stablecoins

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Acquiring Stablecoins

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1. Peg Stability Module (PSM)

1. Navigate to the PSM interface for your chosen stablecoin
2. Enter the amount of the PSM asset (e.g., USDC) to swap
3. Review the output amount (may include a small fee near immutability deadline)
4. Approve the PSM asset (first time only)
5. Confirm the swap transaction

• Zero fee during the first half of the immutability period
• Fee ramps from 0% to 1% during the second half of the immutability period
• Fee goes to local reserves

// Example: Buy stablecoins with USDC
lender.buy(usdcAmount, minCoinOut);

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2. Decentralized Exchanges

1. Connect your wallet to the DEX
2. Select the stablecoin as the output token
3. Choose your input token
4. Execute the swap

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3. Borrow Against Collateral

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Staking for Yield

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How Staking Yield Works

1. Paid debt borrowers pay interest continuously
2. Interest (minus protocol fees) is minted as new stablecoins to the Vault
3. Your share of the Vault grows as interest accumulates
4. Withdraw at any time to claim your principal plus earned yield

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Step 1: Access the Vault

• Vault token name: “Staked [Name]” (e.g., “Staked Monolith USD”)
• Vault token symbol: “s[Symbol]” (e.g., “sUSD”)

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Step 2: Deposit Stablecoins

1. Enter the amount of stablecoins to stake
2. Approve the stablecoin (first time only)
3. Confirm the deposit transaction

// Deposit stablecoins and receive vault shares
vault.deposit(coinAmount, receiverAddress);

// Or specify shares to mint
vault.mint(sharesToMint, receiverAddress);

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Step 3: Monitor Your Position

• Shares owned: Your Vault token balance
• Current value: Shares × share price (increases as yield accrues)
• APY: Based on current borrow rate and total staked vs total paid debt

• Current borrow rate (higher = more yield)
• Ratio of total staked to total paid debt (lower = more yield per staker)
• Protocol fee deductions

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Step 4: Withdraw

1. Enter the amount to withdraw (in stablecoins or shares)
2. Confirm the withdrawal transaction

// Withdraw specific amount of stablecoins
vault.withdraw(coinAmount, receiverAddress, ownerAddress);

// Or redeem specific amount of shares
vault.redeem(shareAmount, receiverAddress, ownerAddress);

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Understanding Yield

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Yield Sources

• Borrower interest: Primary source from paid debt borrowers
• Interest is minted directly to the Vault as new stablecoins

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Yield Distribution

1. Local reserve fee: Goes to instance operator (0-10%)
2. Global protocol fee: Goes to Monolith protocol (0-10%)
3. Staker yield: Remaining amount minted to Vault

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Yield Considerations

• Higher staked ratio = Lower yield per staker (yield is shared among more depositors)
• Higher borrow rate = Higher yield (more interest generated)
• Total paid debt = Base for interest calculation (more paid debt = more interest)

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Vault Token (sToken)

• Transferable: Can be sent to other addresses
• Composable: Can be used in other DeFi protocols
• Yield-bearing: Value increases as interest accrues
• ERC-4626 compliant: Standard vault interface

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Share Pricing

Share Price = Total Assets / Total Shares

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Example Workflow

1. Acquire: Swap 10,000 USDC for 10,000 Coin via PSM
2. Stake: Deposit 10,000 Coin, receive ~10,000 sToken shares
3. Earn: After one year at 5% APY, shares are worth ~10,500 Coin
4. Withdraw: Redeem shares for 10,500 Coin

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Risks

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Interest Rate Risk

• Yield depends on the borrow rate which fluctuates based on market conditions
• Low borrowing demand = low yields

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Smart Contract Risk

• Funds are held in protocol smart contracts
• Review security information and audits

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Peg Risk

• If the stablecoin trades below $1, your Coin holdings lose dollar value
• Redemption mechanisms help maintain the peg

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Quick Reference

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Related

• Peg Stability Module
• Interest Rate Controller
• Vault Contract Reference