⚖️Background

In the current landscape, lending protocols such as MakerDAO, with its DAI stablecoin, and AAVE, with GHO, have revolutionized how users can generate stablecoins by leveraging collateral assets. These platforms provide liquidity against collateral, but they adhere to an over-collateralization model. This model necessitates assigning a specific collateral ratio for each asset, thereby restricting users to borrowing merely a portion of the available stablecoin liquidity based on the defined ratio. Such a mechanism inevitably lowers the overall asset utilization rate.

Wand is designed to enhance asset utilization, enabling users to access 100% liquidity of their assets. This liquidity is split between stablecoins and margin tokens with increased volatility. Both asset types are expected to maintain robust secondary market liquidity and are designed to meet standard asset criteria. To standardize margin tokens, a global debt structure is employed where all users share a pooled Collateralized Debt Position (CDP), facilitating the circulation of these shares. In this way, users can obtain two types of liquid assets with 100% market value using collateral.