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Protocol overview
Gro protocol is a yield aggregator built on risk-tranching. The aim of Gro protocol is to offer high yields for users who are willing to take on more risk, and a safer alternative for users who are risk-averse. The protocol facilitates this by keeping its portfolio exposures within a threshold, including exposures to underlying assets and external defi protocols.
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Gro protocol consists of two native tokens (besides our governance tokens):
- PWRD: A rebasing, yield-generating stablecoin pegged to the dollar. Holders of PWRD are protected against failures in individual protocols and stablecoins by its sister product Vault (GVT). In return for such protection, PWRD shares part of its yield with GVT.
- Vault (GVT): GVT is a risk-bearing asset, not a rebasing stablecoin. GVT receives part of PWRD's yield in exchange for reducing the risk borne by PWRD holders. Yield transferred from PWRD to GVT is based on the utilisation ratio: the ratio of the value of PWRD to GVT in Gro. This yield compensates for the risk of failures in a stablecoin or protocol (e.g., due to a protocol exploit), which will first be absorbed by GVT holders, reducing the risk that PWRD holders will lose any assets. The utilisation ratio also determines how stablecoin assets are invested into underlying yield-bearing strategies.
Gro protocol balances internal assets based on the risk exposure to different assets and protocols. This involves setting allocation targets for stablecoin assets, which are the distribution of stablecoins Gro protocol tries to meet. Gro protocol measures the changing risk exposure and when the exposure is above a predefined margin, the system will rebalance by swapping assets. This uses Curve as the swapping layer, meaning that the system can make decisions on what assets to move in and out independent of what assets the end user deposits/withdraws. Gro protocol determines how much of each asset needs to be added or removed from the system through determining the delta, the difference between the target allocations and the actual assets in Gro protocol.
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For more details about our products, please refer to the "Gro Products" section starting here:
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Last modified 11d ago
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