Vesta Finance is the underlying technology that powers Arbitrum’s stablecoin – VST. It is a layer 2-first stablecoin protocol that allows users to obtain maximum liquidity against their collateral. Essential information for their token is available on the MEXC Digital asset introduction page. Furthermore, we are listing (VSTA/USDT – Trade it here) on our Innovation Zone, check it out now!
How Does Vesta Finance Work?
Vesta is a platform that enables users to create collateralized debt positions called “vaults” on Ethereum. By locking up their cryptocurrency as collateral, users can issue Vesta’s stablecoin, VST, to their Ethereum address and transfer them to any other address. The value of VST is designed to remain stable at $1 USD due to the over-collateralization of the system, where the value of the locked Ether always exceeds the value of issued stablecoins.
The generation of VST is also controlled by an algorithmic interest fee that is variable based on the token’s peg. Users can issue tokens from their vaults as long as the collateralization ratio remains above 110%, meaning that for every $1000 worth of collateral, they can issue up to 909.09 VST. The tokens are freely exchangeable, and upon repayment of a vault’s debt, they are burned. The Vesta system uses a decentralized data feed to regularly update the price of the collateral against USD. Vaults that fall below the minimum collateralization ratio of 110% are considered under-collateralized and are subject to liquidation.
How Does the Stability and Liquidation Pool Work in Vesta Finance?
Vesta uses a two-step liquidation process to address under-collateralized vaults. Firstly, the Stability Pool containing VST tokens is utilized to offset the debt of the liquidated borrower. If the Stability Pool is empty, Vesta’s liquidation bot estimates the value of the liquidated collateral and redistributes it to other borrowers. The Stability Pool primarily uses VST tokens to repay the liquidated debt and absorb the under-collateralized debt.
Anyone can deposit VST tokens to the Stability Pool and earn the collateral from the liquidated vault. During a liquidation event, the liquidated debt is canceled with the same amount of VST in the pool, which is then burned, and the liquidated Ether is distributed proportionally to depositors. Depositors in the Stability Pool generally earn net gains from liquidations as the value of the liquidated Ether is typically greater than the value of the canceled debt.
If the liquidated debt exceeds the amount of VST in the Stability Pool, the system attempts to cancel as much debt as possible with the tokens in the pool and redistributes the remaining liquidated collateral and debt across active vaults. Anyone can use the public Liquidate Troves function to check for under-collateralized vaults and liquidate them or use batch Liquidate Troves with a custom list of vault addresses to attempt liquidation.
Where to buy VSTA Token
You can find VSTA Token here at MEXC! We are listing VSTA/USDT in our Innovation Zone!
What is the Price of VSTA Tokens?
The live price of VSTA tokens is coming to MEXC soon! You can check the live price of their token right here!
How to buy VSTA Tokens
You can buy VSTA Tokens on MEXC by following the steps:
- Log in to your MEXC account and click [Trade]. Click on [Spot].
- Search “VSTA” using the search bar to see the available trading pairs. Take VSTA/USDT as an example.
- Scroll down and go to the [Spot] box. Enter the amount of VSTA you want to buy. You can choose from opening a Limit order, a Market order, or a Stop-limit order. Take Market order as an example. Click [Buy VSTA] to confirm your order. You will find the purchased VSTA in your Spot Wallet.
You can find a detailed guide on how to buy VSTA Tokens here.
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