Use sthAPT as MOD Collateral

Thala Labs
5 min readJan 10, 2024

We are pleased to announce that you can now use Thala’s Liquid Staking token, sthAPT, as collateral with a collateral ratio of 150% for minting the MOD (Move Dollar) stablecoin.

MOD is a decentralized, over-collateralized stablecoin backed by a variety of high-quality, whitelisted assets such as APT (Aptos’s native token), zUSDC (LayerZero’s USDC), CAKE (PancakeSwap’s token), whUSDC (Wormhole’s USDC), and more. MOD can be utilized for various DeFi purposes, including swapping, forming trading pairs, or borrowing.

By adding sthAPT (Staked Thala APT) as collateral, users can now:

  1. Deposit sthAPT as collateral and mint MOD, incurring a one-time minting fee of 0.25% and an interest rate of 2.5%.
  2. According to the Collateral Risk Framework, to ensure low counterparty risk, the Collateral Ratio (CR) is set at 150%. This means for every $100 of MOD minted, $150 worth of sthAPT needs to be deposited.
  3. Use MOD across DeFi platforms to earn additional yields.

Why sthAPT?

In just two months, over $20 million or ~2 million APT has been staked through Thala’s Liquid Staking platform, establishing Thala as the leading staking solution for Aptos. Thala’s liquid staking derivative employs a two-token model:

  1. thAPT — Pegged 1:1 to APT.
  2. sthAPT — Yield-bearing (comprising thAPT + Staking Rewards).

While the aggregate validator rewards are generated by the total supply of Thala’s LST (thAPT + sthAPT), these rewards are primarily distributed to holders of sthAPT. This means that sthAPT holders receive higher staking yields while maintaining exposure to APT.

With sthAPT as collateral, users can now mint MOD, enabling them to earn additional yields on top of their existing sthAPT yields through avenues such as:

  1. Depositing MOD in the Stability Pool to earn ~35% APR.
  2. Providing liquidity in MOD-based pair liquidity pools to earn 10 to 100% APR.

To enable the use of sthAPT as collateral, we have custom-built our own internal TWAP (Time-Weighted Average Price) oracle, ensuring reliable pricing of sthAPT for calculations.

Offering users the opportunity to use sthAPT as collateral moves Thala one step closer to our vision of deeper integration of our LSTs and the creation of a truly decentralized, over-collateralized stablecoin. We are committed to building a comprehensive DeFi ecosystem on top of the LST tokens and enhancing the composability of thAPT and sthAPT. Stay tuned 👀

Important note for existing stakers: To ensure the long-term sustainability of our staking solution, we are increasing our commission rate from 0% to the industry standard of 5%. This means that only 5% will be deducted as commission from the accrued staking rewards.

Thala is a decentralized finance protocol powered by the Move language, enabling seamless borrowing of a decentralized, over-collateralized stablecoin, Move Dollar, and capital-efficient liquidity provisioning via a rebalancing AMM on the Aptos blockchain.

Website: http://thala.fi/

Foundry: https://thalalabs.typeform.com/foundry

Discord: https://discord.gg/thala

Twitter: http://twitter.com/thalalabs

Documentation: https://docs.thala.fi

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Thala Labs

Thala is a decentralized finance protocol on the Aptos blockchain.