Gard.Money Algorand’s First Algorithmic Stablecoin

    Q55. GARD is the world's first algorithmic stablecoin on Algorand's blockchain. Let’s look at the collateral debt positions(CDP) users are taking on. This is where users put ALGOs up as collateral and in turn get GARD(Asset ID 684649988) in return. Gard is a stable coin pegged to $1 in value.

    Introduction

    GARD is the world’s first algorithmic stablecoin on Algorand’s blockchain. It is minted by Algorand Governors who choose to participate in governance through the GARD Protocol instead. These new governors (GARDians) will now send their ALGOs to a smart contract account and commit their ALGOs to create collateralized debt positions (CDPs). To mint GARD, users must commit at least 140% of the value minted in ALGOs. In order for users' positions to stay in good standing, their collateral must remain above 115% of the value of minted GARD.

    GARD is backed by intrinsically valuable collateral and is designed to be a truly decentralized dollar. In other words, GARD is designed to be pegged to USD through a set of rules and balancing mechanisms. Users may mint new GARD by sending their ALGOs to a personalized smart contract account. Users are then free to use their GARD to participate in DeFi. The GARD Protocol creates a system where actively participating users are able to obtain a yield higher than APY earned from participating in governance and reducing opportunity cost courtesy of the minted GARD.

    Let's explore how Algorand Governance Period 3 impacted the mint of GARD. Between March 31st and April 14th, participants could commit their ALGO's through different protocols. How busy were GARDians on this period?

    Source: GARD Whitepaper

    Methodology

    • The minted volume of GARD and unique wallets minting was obtained by querying the algorand.asset_transfer_transaction table, using where sender = 'J2E2XXS4FTW3POVNZIHRIHTFRGOWEWX65NFYIVYIA27HUK63NWT65OLB2Y' to identify GARD's minting address.

    • The volume of fees and unique wallets was obtained by querying the algorand.payment_transactions table with where receiver = 'MTMJ5ADRK3CFG3HGUI7FS4Y55WGCUO5CRUMVNBZ7FW5IIG6T3IU2VJHUMM'.

    • The total collateral backing the GARD was calculated in a three CTE query:

      • The first CTE selected the tx_group_id from algorand.application_call_transaction table where app_id = '684650147' (GARD application) and TRY_BASE64_DECODE_STRING(tx_message :txn :apaa [0] :: STRING) IS NOT NULL, to select the New Position also the tx adding ALGO to the collateral, which are identified with MoreGARD

      • The second CTE queries the algorand.payment_transaction table for the tx_group_id found in the previous CTE; according to the hint there will be one transaction associated with the payment of fees and another with the collateral. All fees are payed to the same address 'MTMJ5ADRK3CFG3HGUI7FS4Y55WGCUO5CRUMVNBZ7FW5IIG6T3IU2VJHUMM' while each user will transfer its collateral to a different account. Therefore, I identifiy the payment type with a case when receiver = 'MTMJ5ADRK3CFG3HGUI7FS4Y55WGCUO5CRUMVNBZ7FW5IIG6T3IU2VJHUMM' then 'fee' else 'collateral' and aggregate the total amount transferred by this variable and by date.

      • Finally, I select only the payment for the collateral and use this data for the visualization. The fee data was used to verify the results of the fee calculation above.

    Results

    Minted GARD and unique wallets minting per day

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    Figures 1. and 2. show the GARD volume minted and the unique wallets minting per day. We see a volume of 303k GARD minted by only 14 wallets on the first day of Period 3 and a volume of 524k minted on April 12th - the last 4 days of the commitment period see a significant increase in the number of wallets minting GARD but only significant day by volume. The total minted volume is just over 1M GARD.

    Figure 3. shows a scatter plot of mints per wallet over time, coloured by total GARD minted per day. Both blue dots correspond with the high volume days (303k and 524k), their difference being the number of wallets involved. March 31st was the whale commitment day and April 12th the fish commitment day.

    Fees

    Figure 4. shows the total fees generated per day in ALGO. With similar peaks as the GARD minted volume, the total fee volume generated is almost 27k ALGO, which has a value of around 19k USD. This results in an approximate fee of 1.9% of minted GARD.

    Figure 5. shows the number of transactions and unique wallets paying fees to the contract.

    A very interesting transaction was found by querying the algorand.asset_transfer_transaction table for the fee receiving address. It seems like the theoretical unlimited supply of GARD will be effectively handled as a supply of 9,200B GARD.

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    Figure 6. shows the daily and total ALGO transfered as backing collateral. A total of 3.8M ALGO have been committed, with an approximate value of 2.9M USD.

    Conclusions

    A total 3.8M ALGO were committed to Period 3 through GARD, minting a just over 1M GARD and paying short of 27k ALGO (aprox. 1.9% of minted GARD).

    A very promising start for the GARD protocol, which doesn't stop in Algorand's Governance or Network but has plans to extended the services to other chains.