Polygon-backed Davos Protocol raises Rs 10 crore in TVL in two months

Polygon-backed Davos Protocol, a Defi ecosystem, has unveiled Davos USD (DUSD), an inflation-proof stablecoin with sustainable yield opportunities; which has raised Rs 10 crores with the total value locked in the first two months. The decentralized stablecoin claims to differentiate itself through transparency and decentralization, backed by various crypto assets managed on-chain.

The DUSD stablecoin is collateralized by Liquid Staking Tokens (LSTs), ensuring stability by preventing the collateral's value from falling below the stable asset value, in contrast to algorithmic stablecoins that face inherent risks.

Varun Satyam, CEO and Co-founder of Davos Protocol, says "With Davos Protocol, we aim to build a stablecoin mechanism which is immune to any market conditions. By offering the DUSD stablecoin to mitigate crypto volatility while providing sustainable yields, Davos Protocol aims to minimize risks associated with DeFi and make it more accessible to retail."

The company also uses an advanced vote-escrow model (veModel) which optimises governance parameters, giving veDGT holders voting power based on the number of DGT tokens locked on Balanced liquidity pools.

Davos Protocol utilises Liquid Staking Tokens (LSTs) as collateral for DUSD. Users stake Polygon’s MATIC LST, Ethereum (ETH) LST, and ETH LST LPs to borrow DUSD at attractive interest rates. The collateral secures the stablecoin and generates yields from native tokens staked on liquidity-staking PoS protocols, promoting capital efficiency and protecting against inflation.