sMONEY: yield-bearing money
Staked MONEY (sMONEY) is a yield-bearing version of MONEY, that automatically earns you MONEY over time. sMONEY is created by wrapping MONEY in the sMONEY contract, which uses a share price model where 1 sMONEY is equal to 1 MONEY initially. The exchange rate then increases over time as interest accrues, which is how yield is automatically earned from only holding sMONEY.
Where does the yield come from?
The yield being paid to sMONEY holders comes from the protocol's earned revenue. The percentage of revenue directed to sMONEY is inversely correlated with the price of MONEY - the further below $1 that MONEY trades, the higher the percentage of revenue paid to sMONEY. In this way sMONEY acts as a tool to help maintain the peg; if MONEY trades too low, the sMONEY interest rate increases and encourages users to purchase and stake MONEY.
How is sMONEY created?
To wrap MONEY into sMONEY, visit the Earn page on the app and click on the sMONEY button: https://app.defi.money/earn/optimism
Wrapping MONEY into sMONEY is instant and can be done at any time.
How is sMONEY unwrapped?
To unwrap sMONEY into MONEY, a user must first burn their sMONEY tokens to initiate what's called a cooldown.
After the cooldown has finished, you can then withdraw your MONEY: https://app.defi.money/earn/optimism
Last updated