The Credit Pool

The Credit Pool is a contract specifically designed to facilitate the controlled sale of Stable Credits to non-members in the form of digital "gift cards".

Discount rate

In order to prevent the emergence of a speculative Stable Credit market, gift cards are sold to the public at a fixed discount rate (managed by network operators). For example, if the discount rate is fixed at 10%, a customer purchasing a $100 gift card will receive 110 Stable Credits. Correspondingly, a member selling 110 Stable Credits, will receive $100 in return.

The discount rate, in conjunction with the network's regular fees, are the only cost to credit pool loan recipients. No interest is charged on loans provided by the Credit Pool.

How it works

The following diagram depicts network members using their credit lines to deposit Stable Credits into the CreditPool in exchange for the network's reserve currency (in this case USDC). Likewise, network participants without credit lines (customers) can purchase the deposited Stable Credits from the CreditPool at a discount using the network's reserve currency as payment. These purchases effectively service the previously mentioned Stable Credit deposits in a first in, first out order.

In order to increase the system’s liquidity and improve the overall user experience, the Credit Pool contract is equipped with a credit line. This means that a customer can purchase Stable Credits even if no member has yet deposited funds into the contract. The Stable Credit deficit created this way will then be rebalanced once a network member deposits Stable Credits into the Credit Pool.


To protect a network’s monetary integrity, the following requirements apply to the usage of the Credit Pool contract:

  1. Members can only access the contract on credit, meaning that only members with a zero or negative balance will be able to deposit Stable Credits into the Credit Pool (by overdrafting their account). This is to ensure that members will not use the contract to off-load positive balances and then abandon the network

    1. However, in cases in which the Credit Pool’s credit line is overdrafted, members with positive balances will be able to swap their Stable Credits for Reference Currency in order to ensure a rapid rebalancing of the contract’s account. This is facilitated via the "Credit Conversion" mechanism explained further under "Network Debt Account".

  2. Members holding negative Stable Credit balances are barred from purchasing Stable Credits from the CreditPool. This is to ensure that members won’t service their debt at discounted rates, which could lead to a devaluation of Stable Credits as a result.

  3. The contract's credit line, used to issue gift cards, is limited to the minting of a sub-inflationary amount of Stable Credits.

    1. The contract's credit line, used to mint gift cards, is calculated as follows: Credit Limit = [(P+0.05P)Q - MV] / V Whereas:

      M denotes a network’s Stable Credit supply

      V a network’s trading velocity

      P the average size of Stable Credit transactions

      Q quantity of transactions This is to ensure that the issuance of gift cards will create inflationary pressures lower than 5%. Note that in any case inflationary pressures will be temporary, and persist only until a member deposits Stable Credits to apply for a loan, or until the account has been rectified through the "Credit Conversion" mechanism.

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