About Valora Protocol
Introduction
The Valora (Decentralized Stablecoin) protocol is a production-ready, over-collateralized, algorithmic stablecoin protocol designed to maintain a soft peg of 1 DSC = 1 USD. The system is inspired by MakerDAO's DAI but built from scratch with modern Solidity practices and comprehensive testing.
Key Characteristics
- 🔒Exogenously collateralized: Backed by external crypto assets (WETH, WBTC)
- 📊200% collateral requirement: Enforced via a 50% liquidation threshold
- 🌐Fully on-chain & permissionless: No governance token, no fees
- 💰Liquidation incentives: 10% bonus for liquidators maintaining system health
System Properties
System Overview
The DSC system allows users to:
Deposit Collateral
Deposit approved collateral tokens (WETH, WBTC)
Mint DSC
Mint DSC stablecoins against your collateral
Maintain Health
Keep a healthy collateralization ratio (≥200%)
Redeem Collateral
Burn DSC tokens to reclaim your collateral
Participate in Liquidations
Help maintain system health and earn a 10% bonus
Health Factor & Liquidations
Health Factor Calculation
The health factor determines the safety of a user's position:
Health Factor Interpretation:
Healthy position, cannot be liquidated
At liquidation threshold, risky position
Unhealthy position, can be liquidated
No debt, perfect health
Liquidation Process
When a position becomes undercollateralized (health factor < 1.0):
Users with health factors below 1.0
Cover some/all of the debt position
Economic incentive to maintain system health
User's health factor increases after liquidation
Protocol health is maintained through liquidations
Contract Information
DSC Engine Contract
DSC Token Contract
About the Developer
Varun Chauhan
A blockchain developer passionate about decentralized applications and smart contract development. Specialized in building secure, efficient DeFi protocols with a focus on stablecoin mechanisms.
"Building the financial infrastructure of tomorrow, one smart contract at a time."