Countdown Begins: What’s New in V4 Smart Vaults?

The future of decentralized finance is evolving fast, and TheStandard.io is at the forefront of that change. With the upcoming launch of Version 4 (V4) of our Smart Vaults, we are introducing groundbreaking features that will transform how you borrow, earn, and manage your assets in DeFi.

So, what exactly is new in V4? Let’s dive into the key innovations that make Smart Vaults more flexible, efficient, and powerful than ever before native on Arbitrum.

1. Trustless Yield on Collateral: Unlock Earning Potential

In V4, we are enabling users to earn trustless yields on their collateral. This feature leverages V3 concentrated liquidity pools on decentralized exchanges (DEXs). Unlike traditional borrowing platforms where your collateral sits idle, Smart Vaults in V4 put your assets to work. Whether your collateral consists of stablecoins or volatile crypto assets, it can now generate significant yields while you maintain control over your private keys. This not only maximizes the utility of your collateral but also provides an extra incentive to keep your vault open.

2. Dynamic NFTs: A New Era of Liquidity

Our V4 update introduces Dynamic NFTs, which represent your vault’s collateral and debt in a single, transferable token. These NFTs enable an entirely new level of flexibility in asset management. You can transfer or sell your locked collateral along with any associated debt in one seamless transaction. This feature makes managing your DeFi portfolio as easy as trading NFTs, unlocking new possibilities for liquidity and strategic portfolio adjustments.

3. 0% Interest Borrowing: Leverage at No Cost

At the heart of TheStandard protocol is the 0% interest borrowing model, and V4 maintains this game-changing feature. Users can borrow USDs, our USD-pegged stablecoin, without incurring any interest costs. In a world where borrowing often comes with significant interest expenses, TheStandard offers a cost-effective way to access liquidity or leverage your assets—perfect for traders, investors, and DeFi enthusiasts looking to maximize their capital efficiency.

4. Flexible Collateral Deployment: Balance Risk and Reward

With V4, users have the power to allocate their collateral between stable, lower-risk pools (such as USDs/USDC) and volatile, higher-risk pools (like ETH/USDs or WBTC/USDs). This allows you to tailor your strategy based on your risk tolerance and market outlook. Want a safer, steady yield? Opt for more stablecoin-based liquidity pools. Looking to capitalize on market volatility? Deploy your collateral in riskier pools with higher potential returns.

This flexible collateral deployment gives you more control over your yield generation and risk management, helping you optimize your borrowing strategy.

5. Global Borrowing Limit: Ensuring Stability

A new feature designed to protect both users and the protocol is the Global Borrowing Limit. This limit ensures the stability of the USDs stablecoin by capping the total amount of USDs that can be borrowed across all vaults. The global borrowing limit is dynamically adjusted and serves as a safeguard during the early stages of V4 to maintain the stability and peg of USDs.

Once the protocol achieves sufficient liquidity and market adoption, the global borrowing limit will be phased out.

6. Tradeable Locked Collateral: Unparalleled Flexibility

In previous versions, once you locked collateral in a vault, you would typically have to repay your loan to withdraw or trade it. Not anymore! With V4, we’re introducing the ability to trade locked collateral without closing your vault.

Let’s say you have ETH as collateral, but you think LINK might be poised for growth. You can now swap ETH for LINK directly within your vault without repaying your debt. This feature offers unmatched flexibility, allowing users to react to market changes and adjust their collateral holdings dynamically.

7. Capital Efficiency: Over-Collateralization at 110%

V4 introduces improvements in capital efficiency, allowing users to borrow with a minimum of 110% collateralization. This is significantly lower than many other DeFi protocols, which often require higher collateral ratios. A lower collateralization requirement means you can borrow more against your assets while maintaining the security and stability of the system.

8. Improved Liquidation Mechanism

To protect the protocol and its users, V4 introduces an improved liquidation system. This upgrade includes protections against flash loan attacks, ensuring a more secure and fair process for handling under-collateralized vaults. Liquidators are incentivized with a 10% profit for repaying debts, helping to maintain the protocol's overall stability.

Why V4 Matters for You

The upgrades in Smart Vaults Version 4 offer a range of benefits:

• Maximized Earnings: Your collateral earns passive income, even while it's locked in a vault.
• Flexibility: Trade locked collateral and transfer entire vaults with ease.
• Efficiency: Borrow more with lower collateralization requirements, maximizing capital efficiency.
• Zero Interest: Borrow USDs with no interest costs, freeing up funds for investment or liquidity.
• Risk Management: Customize your risk profile with flexible collateral allocation between stable and volatile assets.

V4 Smart Vaults aren’t just an incremental improvement—they represent a leap forward in DeFi borrowing, offering users unparalleled flexibility, security, and earning potential. As we count down to the official launch, TheStandard continues to lead the way in making decentralized borrowing more accessible, efficient, and rewarding.

Stay tuned for more updates, and be ready to unlock the full potential of your assets with V4 Smart Vaults!

Get Involved‍

Want to be part of TheStandard's future? Join our community on Discord and follow us on social media to stay updated on the latest developments. The countdown to V4 has begun, and we can’t wait to launch this groundbreaking update.