Introducing Tethys: Democratized Liquidity Pool Powered Stablecoin On & Off Ramps

Abstraction

Most DeFi products are focused on the acquisition of a customer base that has familiarity with blockchain concepts such as stablecoin pegs, addresses, gas fees, transaction hashes, block-times and many others.

Maintaining Value Parity

The market is flooded with onramp solutions that span several blockchains and allow users to purchase crypto currencies through a simple user interface such as MoonPay, Transak and Wyre.

Transak Stablecoin Onramp presenting an off-peg calculation Taken at: 14:28 pm CET 12 March 2021

Hop Count

For projects that provide deposits or for crypto users looking to minimize their transaction fees, the few viable routes available use exchanges such as Binance or Coinbase for conversions and withdrawals.

  1. Deposit EUR through a chosen payment method, which may be subject to additional fees
  2. Exchange their EUR to a token or cryptocurrency that contains a pair with a Terra supported token or cryptocurrency such as USDT or BTC.
  3. Purchase the Terra supported token or cryptocurrency such as LUNA.
  4. Withdraw to a Terra wallet and potentially incur withdrawal fees.
  5. Finally, perform an EUT swap which may incur additional trading fees.

Introducing Tethys by Saturn Money

Tethys is a democratized liquidity pool powered gateway that enables seamless transitions between fiat and stablecoin based currencies, encouraging development and adoption of the Terra ecosystem.

Mechanics

Liquidity Pools

Tethys aims to introduce fiat and stablecoin liquidity pools for GBP/GBT and EUR/EUT pairs. Unlike traditional liquidity pools for activities such as trading, Tethys liquidity providers will be immune to impermanent loss, have control over flexible community governance and also have the potential for other rewards, offering the liquidity provider a new income stream.

Balance Mechanism

A liquidity provider can redeem their LP tokens for a percentage share of the underlying liquidity pools, this would get deposited directly into the liquidity providers’ EUR/GBP bank account and Terra wallet.

Incentivized Partnerships

Partnerships with selected vendors would help balance the Tethys liquidity pools. Take for example a yield generating DeFi protocol, it is likely that onramp activity (deposits in EUR/GBP) would far outweigh the offramp (withdrawals from EUT/GBT) and thus the impact on the pools would be dominated towards a fiat currency shift.

Governance

There are a number of decentralized governance opportunities for Tethys, listed as follows:

Limitations

In an ideal world, a system such as this would be implemented through fully decentralized architecture. However, in order to enable a fiat currency pool and ensure automation of on/off ramp services, Saturn will have to act as a custodian to the pools and implement and maintain all associated infrastructure.

Value

Maintaining Value Parity

Tethys operates on the assumption of eventual parity and will rely on the Terra price stabilization mechanisms to correct any peg deviation for stablecoins.

Increasing Adoption

Tethys will provide a full suite of APIs for developers who wish to build on Terra and target European customers. Developers will be able to leverage Saturns’ direct banking integrations to create the same seamless user experience that Saturn Money achieves by traversing the fiat to crypto barrier with minimal fees.

Reduced Fees

Centralized systems operated by other gateway service providers are generally inward-facing and attract customers that are familiar with stablecoins and how pricing can vary due to a peg deviation. As a result, value loss on a simple transfer has potential to greatly increase, in addition to any provider service fees.

Summary

Tethys’ goal is to provide scalable guarantees and pluggable infrastructure on value transfer for fiat and stablecoin transactions. We are preparing to launch a frictionless gateway that allows for a seamless transition between fiat and selected stable coins with absolute parity via direct banking integrations.

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