How we got here
The idea stemmed from two core problems:
Sustainable yield: How can we create a product that delivers sustainable, organic yield, not constrained by borrow demand or reliant on short-term incentives and points-farming?
Stablecoin liquidity: Sourcing stablecoin liquidity remains the primary bottleneck to scaling CDP-style stablecoins.
We built Everlong to solve this liquidity bottleneck whilst providing a sustainable source of yield for those who want to stay long their deposit assets.
Why CDPs fail to scale
CDP-based stablecoin systems have repeatedly struggled to scale: The root cause is the mismatch between demand for cheap leverage and sourcing sufficient stablecoin liquidity to meet that demand. an initial surge of minting and inflation of the stablecoin supply, followed by gradual deflation and shrinking supply as redemptions and arbitrage unwind collateral to maintain the peg. Previous attempts and lessons learned
Some protocols, tried creative workarounds (for example Abracadabra, design that let LP-backed stables be re-used as collateral under special rules), but unfortunately none prevailed.
The first attempt
Idea: use LPs as collateral and borrow stables against them, then use those stables to take the opposite trade (so you remain long the asset but capture LP fees).
Mechanics in practice: by maintaining modest loop leverage (e.g., 1.3–1.7x) you could retain ~1 BTC or ETH worth of exposure with almost no liquidation risk. On-chain long positions offered cheaper leverage than perps, so the math looked attractive: LP yield needed only to cover rebalancing costs to offset impermanent loss.
Why it fell short: the stablecoin side still experienced sell pressure during stress. That pushed interest costs up, and uncertainty about whether LP rewards and fees were sustainable under different market conditions forced us to rethink the model. The core insight remained valid - LPs + preserved exposure is powerful - but paying interest on borrowed stables was the key drag.
Everlong
We kept the core insight (earn LP fees while staying long), but redesigned in a mannor that removed the need for interest rates. The core ideas:
Depositors keep their long exposure (vault share accounting preserves the asset economics).
Looping without interest drag: instead of relying on external lenders where interest needs to be paid, the vault flash-mints the protocol stable to pair with the asset and supply LP. This provides productive liquidity for the stablecoin. Since interest rates in CDPs are routed back through to incentivise liquidty paired with the stablecoin you can set them to 0. Meaning that using the CDP allows you to borrow the otherside at no cost.
Net effect: you get 2x the liquidity (because the loop allows you to have all the deposit assets + debt/stablecoins in the LP ) in turn keeping directional exposure to the deposit asset.
Why this matters - yield + liquidity, not one or the other
Everlong sits at the intersection of two problems:
Yield: how do we extract recurring fee yield from AMM liquidity whilst enabling depositors to maintain full price exposure?
Liquidity: how do you source liquidty to sustain leverage and prevent the redemption loop that has cursed all CDPs.
Everlong is a practical design that addresses both by turing the volatility of the assets into sustainable yield with the side effect of provising productive liquidity for the CDP stablecoin
Final product: why Everlong succeeds
No recurring interest drain: due to providing productive liquidity their is no need for interest rates. (free leverage)
Preserved exposure: depositors stay long their assets, with no drawdowns
Engineered for safety: constant leverage is retained as prices fluctuate leading to no liquidation risk (see here for real life black swan results)
Empirical validation: we ran extensive simulations and iterations (including mainnet forks and live deployments) to tune ALM and leverage settings before settling on the current design.
Where this leads
More efficient on-chain leverage venues where synthetic primitives drive liquidity rather than traditional lender markets.
Vertically integrated stacks (DEX + lending + synthetic rails) that can compete with traditional money markets for capital efficiency.
Expansion to other asset classes that have low volatility but high volumes.
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