🎣Welcome to Ebisu

Introduction

Ebisu Money is a Stablecoin Credit Market that facilitates economic activity between ebUSD Borrowers and Stability Pool depositors:

Borrower' Roles

• Deposit collateral and mint ebUSD

• Pay a "user-set" interest rate + upfront borrow fee

• Manage their position to avoid liquidation and redemption

Earner's Roles

• Passively provide ebUSD liquidity to Stability Pool to absorb liquidations

• Stability Pool depositors the majority of ebUSD denominated interest and fees paid by Borrowers + collateral denominated profits from liquidations

• Provide ebUSD liquidity on DEXs earning trading fees + a portion of ebUSD denominated interest and fees from Borrowers

Key Unlocks of Ebisu’s Design

As a Stablecoin Credit Market, the protocol’s role is facilitating a dynamic rate equilibrium:

Ebisu Money connects Borrowers and Earners through a market for interest rates: Borrowers compete by setting rates that balance cost with redemption risk, while Earners assess whether the offered rates justify the risk.

The emergent property of Ebisu’s design is a self-regulating credit market where interest rates reflect the true cost of capital for each collateral type — without centralized rate setting or lender-side liquidity.

Emergent Properties

• Market-Driven Price Discovery: Borrow rates in Ebisu are forward-looking, emerging in real time from Borrowers’ willingness to pay and Earners’ demand for risk-adjusted yield — unlike reactive rate models based on governance-set utilization curves.

• Structural Efficiency: ebUSD is minted directly against collateral, eliminating the need for lenders. This reduces friction, lowers borrowing costs, increases yield for Earners, and avoids idle liquidity and rate spikes/liquidity crunches.

• Real Yield: Stability Pool depositors earn sustainable yield from borrower interest, upfront fees, and discounted collateral during liquidations — with yield amplifying as ebUSD adoption grows and pool utilization decreases. DEX LPs also earn a portion of interest and fees.

Key Risks

For Borrowers

• Liquidations — If your position exceeds the maximum LTV for the collateral, it can be liquidated through the Stability Pool. Each collateral has its own pool that absorbs debt from liquidated loans by burning ebUSD.

• Redemptions — When ebUSD trades below $1, arbitrageurs can redeem it for $1 worth of collateral, starting with the lowest-interest-rate loans. Borrowers with low rates face higher redemption risk.

For Earners

• Liquidations — During liquidations, your ebUSD in Stability Pool is burned and you receive the corresponding amount of collateral (e.g., WBTC in the WBTC pool) exposing you to its market volatility.

• Impermanent Loss — If you provide ebUSD liquidity in DEX pools, price divergence between ebUSD and the paired asset can result in impermanent loss, especially if ebUSD depegs or re-pegs sharply.