Allocating Leverage Liquidity

While CDP stablecoins are many, Seneca Dollars are unique in the sense that they can be used to leverage up on exposure to DEX Liquidity Pools. This means not only leveraging the rewards of the Seneca user, but increasing liquidity depth for the leveraged LP asset immensely. Accordingly, the more liquidity allocated for leverage per LP token vault, the more efficiently that protocol can build liquidity.

This enables Seneca to form a positive-sum relationship with the issuers of these collateral assets (other protocols issuing tokens and liquidity incentives for them). With a minting cap on SEN based on liquidity, it becomes beneficial for other protocols to grow SEN liquidity, incentivize the largest minting caps for their assets and therefore, the most liquidity provided through Seneca. We aim towards a future when dollars of liquidity generated per dollar spent on bribes to SGT holders vastly outperforms any other bribe market.