Local and Global Price Stability Modules
To ensure the stability of each stablecoin instance, we introduce a Local Price Stability Module (LPSM) for every chain partner. The LPSM is a simple USDC wrapper on Ethereum mainnet. When users mint their chain native stablecoin called “rUSDC-chainname” by supplying USDC. This USDC liquidity can be used to redeem the stablecoin of the same chain back to USDC.
Key aspects of the LPSM:
1:1 redemptions from rUSDC-chainname to USDC
If one LPSM “gets rekt,” it does not impact the other LPSMs.
The success of one LPSM does not directly benefit the LPSMs of other chains.
To address this, we introduce the Global Price Stability Module (GPSM), which operates as a Relend Network Morpho Vault. This GPSM serves a crucial role in lending USDC liquidity when a LPSM runs out of liquidity. The GPSM ensures that revenues from all rUSDC borrowed on partner chains is shared with liquidity providers, strengthening the overall ecosystem.
Key aspects of the GPSM:
Suppliers to the Morpho Vault benefit from lending revenues across all rUSDC instances.
If one chain fails, the risk curator can choose not to lend liquidity to that LPSM, protecting the integrity of all LPSMs.
Even if the GPSM takes a temporary hit, it does not impact the long-term stability of the stablecoins, as they remain backed by collateral.
Short-term volatility may occur, but the design ensures systemic resilience.
Features
Security and Risk Isolation: A failure in one chain does not compromise the entire ecosystem.
Composability and Growth: Strong rUSDC instances help enhance the stability of others.
Efficient Liquidity: Users can mint and redeem stablecoins seamlessly, with a reliable 1:1 peg to USDC.
Scalable Credit: Native stablecoin minting allows users to access credit at scale without the need to compete for USDC/ USDT liquidity with other chains.
Decentralization and Trust Minimization: Relend Network reduces systemic risk while maintaining decentralization across Ethereum’s multi-layered ecosystem.
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