How it works

Using Aqua Protocol: A Step-by-Step Guide

Aqua Protocol offers a seamless process for using your TONCOIN or Liquid Staking Tokens (LSTs) to borrow AquaUSD, a stablecoin, which can be used in various DeFi activities. Here’s how it works:

1. Provide a Deposit:

• Deposit TONCOIN or LSTs: Start by depositing your TONCOIN or LSTs (such as stTon, tsTon, hTon, wlTon) into the Aqua Protocol. This deposit acts as collateral for borrowing.

2. Get AquaUSD on Credit:

• Receive AquaUSD: Based on your collateral, you can borrow AquaUSD from the protocol. The amount of AquaUSD you receive will be equivalent to 50% of the value of your deposited collateral. The minimum collateral ratio for minting is set at 200%.

• Collateralization Percentage: This 50% collateralization is necessary to maintain the protocol's security, considering the volatility of the cryptocurrencies used as collateral.

3. Use AquaUSD in DeFi:

• Diverse Use Cases: AquaUSD can be used for various purposes like exchanging into other coins or stablecoins, trading, hedging risks, providing liquidity, purchasing NFTs or another tokens, and more.

• Gaining Leverage: You also have the option to re-deposit AquaUSD into Aqua Protocol. This strategy can increase your leverage, potentially amplifying profits from liquid staking and benefiting from a rise in the price of Toncoin.

4. Repay the Loan to Retrieve Your Collateral:

• Reclaiming Collateral: If you wish to get your collateral back, simply repay the borrowed AquaUSD. Upon repayment, your collateral will be released and made available for withdrawal.

In summary, Aqua Protocol provides a straightforward and flexible way to leverage your TONCOIN or LSTs, allowing you to engage actively in the DeFi space while maintaining the opportunity to profit from your staked assets.