General Information

What is Ethos Reserve?

Ethos Reserve is a decentralized lending protocol that allows users to take out interest-free loans against collateral such as BTC, ETH, and LSDs. Loans on Ethos Reserve are paid in Ethos Reserve Notes, or ERN, which is a stable asset pegged to the US Dollar.

Loans drawn from Ethos Reserve require users to maintain a minimum amount of collateral in the system to cover their debt. These collateral ratios are as low as 108% for ETH and 110% for BTC, and may be lowered over time depending on usage.

Collateral backing ERN is used to generate passive yield, which is directed toward Stability Pool depositors. These depositors secure the protocol against unhealthy collateral by depositing their ERN tokens into a pool which liquidates unhealthy positions within the system.

Why does Ethos Reserve exist?

Ethos Reserve was designed to create a decentralized source of yield that is self sustaining and highly stable, powered by ERN. ERN depositors are recipients of all yield generated by its volatile underlying assets, giving Ethos Reserve the power to de-risk yield for the end user. This gives DeFi builders a powerful new primitive to build on, backed by the scalable yield of ETH, robustness of BTC, and stability of a USD-pegged asset.

What are the benefits of using ERN?

ERN provides users with a number of potential benefits:

• 0-interest borrowing

• Capital efficient loans

• No exposure to centralized collateral types

• Single-sided yield within the Stability Pool

• Exposure to volatile asset yield with a stable asset (ERN) price

• Yield generation from collateral volatility through liquidations

• Simple swaps to any other asset on top DEXes

This list will grow over time, with new use-cases and benefits being explored by the Ethos Reserve team and ecosystem partners every day.

What can you do with the Ethos Reserve protocol?

Ethos Reserve has a number of useful functions which allow users to fine-tune their volatile asset exposure and gain yield on their ERN and OATH tokens.

• Efficiently borrow against collateral by creating a position

• Deposit ERN into the stability pool to receive rewards

• Stake Bonded OATH (bOATH) tokens to earn fee revenues

• Redeem ERN for underlying assets if it falls below peg

• Trigger liquidations in exchange for rewards paid in ERN

The Ethos Reserve team will continue to add functionality to the protocol. Stay tuned.

What is OATH?

OATH is the governance token of Ethos Reserve, and can be paired with ETH to create Bonded Oath (bOATH). Bonded Oath can be staked by users to earn yield from the protocol and facilitate trading of the OATH token various partner platforms (example: Beethoven-X).

What does it cost to use Ethos Reserve?

Users are charged a small fee every time they borrow assets on the platform, starting at 0.5%. This fee will be displayed clearly on the front-end, and is routed to $bOATH stakers. Users also pay a refundable deposit in the event their position must be closed by liquidators. This deposit is to refund liquidators for gas and ensure liquidations happen in a timely manner.

There is also a small fee charged when under-peg ERN tokens are redeemed for collateral, however this operation is performed almost exclusively by bots and professional arbitragers. Redemptions are not the same as withdrawals, and do not require an open position to perform.

Has Ethos Reserve been audited?

Ethos Reserve has been audited by several teams through its $150,000 Code4Rena bounty program, in which 154 independent smart contract auditors participated.