We recently launched our blockchain-powered Euro Vaults and as we’ve received many questions related to this new feature and how it generates interest, we’d like to provide a simple explanation here for all of our fellow Akters.
First of all, when you deposit euros in a Euro Vault, the euros are automatically exchanged into Euro PAR stablecoins. The Euro PAR are then automatically put on a decentralised protocol with a lending and borrowing mechanism.
PAR is a stable coin collateralized by over 6 different tokens on 3 different networks.
The PAR’s peg is guarantee : If PAR is trading below 1€, people are incentivized to buy PAR from open markets and pay off loans at a discount. This ensures that PAR won’t be worth substantially less than 1€ at all times.
Interest is generated when your digital assets are lended to people who use their crypto holdings as collateral in order to take out a line of credit.
The interest rate is variable and based on supply and demand. If many people want to borrow your digital assets, the interest you earn goes up. If only a few people want to borrow the assets, the interest goes down.
The smart contract deployed by the protocol secures the vault deposits by guaranteeing an over-collateralisation of all the credit lines that are taken out.
The Euro Vaults creates transparency for all parties involved thanks to the blockchain as anyone can audit the open source protocols powering this feature that you can find here.
- If daily earnings are activated before 5PM, interests will be paid the next day at 5PM because we had time to collect your deposit and make these funds available on the Defi system provided by Mimo.
- If daily earnings are activated after 5PM, interests will be paid the day after tomorrow at 5PM because your funds haven't been put at time into the pool that Mimo use to generate interests. That is why they will only consider your funds the day after that you activated your daily earnings because after 5PM they can not take in consideration your deposit to add it on their pool, pool used on the markets.