Indigo ProtocolPrice

(INDY)

Indigo Protocol is a decentralized synthetics protocol built on the Cardano blockchain. It allows users to create iAssets, which are synthetic tokens that track the price of real-world assets like Bitcoin and Ethereum without requiring bridges. INDY is the protocol's native governance and utility token. Holders use INDY to vote on DAO proposals, direct token emissions to specific liquidity pools, and earn a share of protocol fees as 'Real Yield.' You can acquire INDY tokens on LBank and other supported trading platforms.

Users mint iAssets by opening a Collateralized Debt Position (CDP) and locking ADA or other approved assets into a smart contract. Once the collateral is secured, users can mint synthetic tokens like iUSD or iBTC against it. Indigo supports liquid staking, meaning that ADA locked as collateral continues to earn native Cardano staking rewards. These rewards are typically used to strengthen the health of the user's position or are passed back to the user, providing high capital efficiency.

INDY Staking involves locking INDY tokens to participate in governance and earn a portion of protocol fees. Stability Pools, however, act as a liquidity backstop for the protocol. Users deposit iAssets (such as iUSD) into these pools to facilitate liquidations. When a user's CDP becomes undercollateralized, iAssets from the pool are burned to cancel the debt. In return, Stability Pool providers receive the liquidated ADA collateral at a discount and earn INDY rewards. A decreasing pool balance indicates that you are successfully acquiring ADA at a discounted rate.

Liquidation is triggered when a user's Collateral Ratio (CR) falls below the Minimum Collateral Ratio (MCR), which is typically between 110% and 120%. In Indigo V2, a 'Redemption' feature was introduced to help maintain the price peg of iAssets. This mechanism allows users to exchange iAssets directly for ADA collateral from the positions with the lowest collateralization. While this ensures iAssets remain backed and stable, it means some CDP holders may have their positions partially closed by others to maintain the protocol's health.

Indigo V2 introduced algorithmic interest rates and Maintenance Ratios to improve the stability of iAsset price pegs. These interest rates make it more expensive to maintain high-debt positions when an iAsset is trading away from its target price. By increasing the cost of borrowing during depegging events, the protocol incentivizes users to close their positions and burn iAssets, which helps bring the supply back into balance and restores the asset's peg to its real-world counterpart.

If you are unable to close a CDP, ensure that your minted iAssets are not currently deposited in a Stability Pool. You must withdraw them before they can be burned to settle your debt. If your balance has decreased due to liquidations, you may need to purchase additional iAssets on LBank to cover the original debt. For interacting with the Indigo Web App, use standard Cardano-native wallets that support dApp integrations and smart contract interactions.