GRO PROTOCOL AND ITS PRODUCTS
Hello, friends! Today I want to introduce you to the Gro Protocol, which is a stablecoin yield aggregator that balances risks, offers leverage and protects savings using the tranche mechanism.
Two products were created based on the Gro Protocol:
● PWRD is a product that simultaneously protects savings and allows you to earn income. Using PWRD, you will be able to profit from your funds, knowing at the same time that they are completely safe. Moreover, the PWRD risk, consisting of stablecoins, is diversified and significantly lower than that of other products on the market. This is explained by the fact that the PWRD is 100% protected by the capital placed in the Vault. Its value is supported by the three best-selling stablecoins (DAI, USDC and USDT), but is also protected from problems with any of them. PWRD is a more stable coin, as Vault absorbs any price volatility of the underlying stablecoins. PWRD has built-in deposit protection and built-in profitability delivered as a stream of new tokens to your wallet.
● Vault, also called Gro Vault Token (GVT) is a leveraged stablecoin yield optimizer that provides access to high returns thanks to a constantly optimized portfolio of strategies. Vault plans to become the most profitable stablecoin storage on the market. Using Vault, you get a higher profit with leverage, taking on more risk. Moreover, Vault’s revenues are much higher due to the use of assets in PWRD, that is, the more PWRD, the higher the leverage and profitability of Vault. However, protocol losses are primarily covered by Vault. It is important to understand that Vault owners act as defenders of PWRD, and their remuneration increases as more assets are contributed to PWRD.
Simply put, PWRD users buy deposit protection from Vault holders through a profit-sharing mechanism. This means that Vault holders absorb market failures, but at the same time receive a higher percentage of profitability. Vault is designed primarily for long-term high-yield investments that do not require any actions from the holders.
Gro Protocol has the following features:
● Optimization of yield occurs through the use of constantly updated strategies for increasing the yield of a stablecoin (lending, automated market creation, protocol incentives).
● Balancing risks associated with stablecoins and smart contracts to generate high returns while maintaining a balanced risk profile. That is, the Gro risk balancer distributes risks between stablecoins, which in turn protects PWRD from failures and protects deposits.
● Tranching risks and returns, giving you the choice between higher returns (Vault) or more protection and lower risks (PWRD stablecoin) depending on your preference. The income from one tranche (PWRD) is transferred to another (Vault) in exchange for protection.
In other words, contributors to the Vault earn a higher return on the system, but also take on the additional risk of the smart contract and stablecoin. Conversely, the PWRD stablecoin receives a smaller share of the system’s income but is protected from these risks through Vault.
By the way, you can follow the influence of the Gro Protocol on various stablecoins on the control panel of the Gro decentralized application https://app.gro.xyz/.
The Gro Protocol has its Gro DAO Governance Token (GRO), whose holders participate in the governance and further stabilization of the protocol. I will tell you more about the GRO token in my next article.
In summary, Gro Protocol makes it much easier to earn income from stablecoins, and Gro Protocol products provide users with easy and convenient access to DeFi.
This concludes this review, bye everyone, see you soon!
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