2026-01-08 07:28:39

Recently, many people have been discussing Lista DAO's USD1 stablecoin, especially the 1% borrowing interest rate which is quite eye-catching. But how is it possible to have such a low rate? Today, let's take a deep dive into the underlying technical logic.

What ensures the price stability of USD1? Essentially, it's an algorithmic automatic adjustment. When the price exceeds $1, the protocol increases USD1 supply; when the price drops below $1, the protocol initiates a buyback mechanism. It sounds simple, but this mechanism can effectively anchor the price, directly lowering borrowing costs—that's why users can enjoy such low interest rates.

So, where are the technological innovations? There are four main aspects:

**First is the flexible design of the over-collateralization model.** Users need to collateralize higher-value assets; for example, collateralizing $100 worth of BTCB allows borrowing up to $70 of USD1. This may sound restrictive, but in reality, it's protective—reducing default risk, easing liquidation pressure, and enabling the protocol to operate more stably. Compared to traditional lending protocols like Aave and Compound, Lista DAO's collateralization requirements are more flexible, allowing users to adjust based on their risk preferences rather than adhering to fixed ratios.

**Second is the automation of the algorithmic adjustment mechanism.** No manual intervention is needed; it's entirely driven by market signals. When demand rises, the system automatically increases issuance; when demand falls, it automatically conducts buybacks. This not only helps maintain USD1's price stability but also significantly reduces operational costs.

**Third is the design of liquidity incentives.** Lista DAO encourages user participation through liquidity mining. Users who deposit USD1 into liquidity pools can earn LIS tokens as rewards. This approach continuously attracts liquidity, making USD1 easier to trade in the market and fostering a more active ecosystem.

**The fourth innovation lies in the overall sustainability of the mechanism.** Through this combination—flexible collateral ratios, automated algorithms, and ample incentives—Lista DAO has created a relatively stable and low-cost lending ecosystem. Borrowers benefit from low interest, the protocol's risk remains manageable, and the ecosystem can develop healthily.

Of course, every DeFi product carries risks; nothing is entirely risk-free. But from a technical design perspective, Lista DAO has indeed found a feasible solution in the realm of algorithmic stablecoins.

LISTA0,59%

USD10,02%

AAVE1,33%

COMP0,18%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

17 Likes

Reward
17
6
Repost
Share

Comment

0/400

RunWithRugs

· 01-09 23:49

1% interest rate, is it real? Isn't it too low to worry about scams? 2. The algorithm automatically adjusts sounds fancy, but who guarantees it won't have bugs? 3. Liquidity mining + low interest rates—this combo feels like overdrawing the future... 4. Over-collateralization at 70%, this ratio is really aggressive, it feels like betting that the market won't crash 5. From Aave to Lista DAO, I've tried various stablecoins, and this approach is indeed fresh 6. Sustainable development? I think it depends on how the bull and bear markets perform 7. Sounds great, but DeFi's history has taught me not to trust "perfect design" too much 8. Automated mechanisms avoid manual intervention, but brother, has the code been audited? 9. Liquidity incentives can definitely attract people, but I'm worried that once incentives stop, no one will play 10. Risk control is relative; in the crypto world, I trust this the least

View OriginalReply0

MemeCurator

· 01-09 01:31

1% interest rate? I feel like something's not right 2. Basically, it's just a money-printing machine. Who's responsible if the price crashes? 3. Flexible collateral sounds good, but I'm worried there might be traps when they run away 4. Algorithmic automatic adjustment—this term gives me a headache, still can't trust it 5. Liquidity mining to cut leeks is an old trick, just a different name 6. Is risk controllable? What risk is there in DeFi... 7. This set of tactics is just to siphon blood, wake up 8. Feels like the prelude to the next Luna again 9. There must be something fishy behind the low interest rates; stablecoins are most likely to fail 10. Having many innovations doesn't mean it won't blow up; I'll wait and see 11. No matter how advanced the technical design is, it can't resist human greed 12. I'm choosing to watch this wave, won't take the final step

View OriginalReply0

shadowy_supercoder

· 01-08 07:58

1% interest rate sounds impressive, but in reality, it's just a trick of the algorithm adjustment, and it won't last long. --- Forget it, another stablecoin. Let's wait and see who takes the bait. --- Over-collateralization at 70%? Still claiming flexibility, laughable. Isn't this just spot arbitrage? --- Liquidity mining incentives, this trick is too old, been played out long ago. --- Risk is on your own, everyone. Without the phrase "absolutely safe," it's enough. --- The reliability of the buyback mechanism depends on the token price. Don't be too naive, brother. --- LIS token rewards are going to be diluted again. I feel like I didn't miss out. --- Flexible collateral ratio? Still passing the risk onto users.

View OriginalReply0

GasFeeNightmare

· 01-08 07:47

1% interest rate sounds great, but can this stablecoin mechanism really hold up? I'm a bit worried. Honestly, algorithmic automatic adjustment sounds good, but I'm afraid market fluctuations could cause it to fail. Flexible collateralization... sounds good, but how does it work in practice? Has anyone tried it? Liquidity mining with reward tokens—this trick isn't new. In the end, it still depends on the LIS price trend. This combination sounds nice, but lacking risk warnings is a bit irresponsible. DeFi being both lending and stablecoins makes it more complex and prone to issues. Low interest rates always come with a price, but I wonder if the risks that might appear someday will actually materialize.

View OriginalReply0

zkNoob

· 01-08 07:41

1% interest rate sounds great, but I always feel there's a catch The buyback mechanism sounds like robbing Peter to pay Paul How long can this logic last? The key still depends on the vitality of the ecosystem Another algorithmic stablecoin, the shadow of UST still hasn't disappeared Flexible collateralization ratio sounds good, but it might be fierce during actual liquidation LIS token incentives, another classic Ponzi scheme Low interest rates come with high risks, don't be fooled It's interesting, but I still want to see the data speak The issuance and buyback model, I've heard it too many times

View OriginalReply0

TokenStorm

· 01-08 07:37

A 1% interest rate sounds outrageous, but on-chain data will tell the truth. Algorithmic automatic adjustment sounds romantic, but the liquidation mechanism is the key. How long can this buyback last? Flexible collateralization sounds good in theory, but it actually increases the liquidation risk factor. I bet it can withstand it. The old trick of liquidity mining will eventually lead to a harvest, but I still bought some LIS. A beautiful technical chart doesn't mean low risk. The eye of the storm is always the most comfortable, but the outcome is usually not good. Good backtest data can't save an unreliable economic model, but who made us all gamblers? If USD1 stability relies on buybacks, then how big is the fund pool? Who dares to say there's no problem? On-chain whales are starting to move again. We small shrimp must keep a close watch.

View OriginalReply0