Protocol Participants

In Selenium Protocol, users act in one or more of the following roles:

• Trader

• Minter

• Liquidity Provider

• Staker

Trader

A trader engages in buying and selling Selenized Assets against approved collaterals through Terraport and benefits from price exposure and arbitrage opportunities.

Minter

A minter is a user that enters into a collateralized debt position (CDP) in order to obtain newly minted token of a Selenized asset. CDPs can accept collateral in the form of LUNC, Selenized assets, or any whitelisted collateral and must maintain a collateral ratio above the Selenized asset's minimum multiplied by a premium rate for each collateral type (set by governance).

Excess collateral can be withdrawn as long as the CDP's collateral ratio remains above the minimum. Minters can adjust the CDP's collateral ratio by burning Selenized asset or depositing more collateral.

Liquidity Provider

A liquidity provider adds equal amounts of a Selenized asset and USTC to the corresponding Terraport pool, which increases liquidity for that market. This process rewards the liquidity provider newly minted LP tokens, which represent the liquidity provider's share in the pool and also provide rewards from the pool's trading fees. LP tokens can be burned to reclaim the share of Selenized asset and USTC from the pool.

Staker

A staker is a user that stakes either LP tokens (with the Staking Contract) or Selenium tokens in order to earn staking rewards as Selenium tokens. Stakers earn rewards from new Selenium tokens from inflation.

LP Tokens can be unstaked at any time.