Starknet's latest Extended upgrade has really clarified the way funds are utilized.
Veterans are well aware of the previous awkward situation: USDC either had to be deposited into the treasury to earn interest or used on exchanges to leverage positions. You can't have both, and half of the funds are always sleeping.
The Extended approach is quite aggressive: depositing USDC into the treasury can earn XVS tokens, and importantly, these XVS can be used as contract collateral.
This is equivalent to the same amount of money earning interest and opening positions simultaneously, effectively doubling liquidity utilization. For those who want steady returns without missing out on market opportunities, this design indeed addresses a key pain point.
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Starknet's latest Extended upgrade has really clarified the way funds are utilized.
Veterans are well aware of the previous awkward situation: USDC either had to be deposited into the treasury to earn interest or used on exchanges to leverage positions. You can't have both, and half of the funds are always sleeping.
The Extended approach is quite aggressive: depositing USDC into the treasury can earn XVS tokens, and importantly, these XVS can be used as contract collateral.
This is equivalent to the same amount of money earning interest and opening positions simultaneously, effectively doubling liquidity utilization. For those who want steady returns without missing out on market opportunities, this design indeed addresses a key pain point.