{"id":"preon-finance","version":1,"language":"en","title":"Preon Finance","hidden":false,"content":"**Preon Finance** is a [crypto](https://iq.wiki/wiki/cryptocurrency) lending platform that allows users to utilize their digital assets as collateral and secure loans in [stablecoin](https://iq.wiki/wiki/stablecoin). [\\[1\\]](#cite-id-2ouojuwauht)[\\[2\\]](#cite-id-24vyum7h7db)[\\[3\\]](#cite-id-3jzmerz7gil) \n \n# Overview \n \nLaunched on the [mainnet](https://iq.wiki/wiki/mainnet) in July 2023, Preon is a CDP (collateralized debt position) lending protocol that is part of the Sphere Ecosystem’s suite of solutions disrupting the [DeFi](https://iq.wiki/wiki/defi) space. It also incorporates some elements of [yield farming](https://iq.wiki/wiki/yield-farming) and concentrated liquidity, with [tokenomics](https://iq.wiki/wiki/tokenomics) and synergies. [\\[4\\]](#cite-id-h0kt7phzd3) \n$$widget0 [YOUTUBE@VID](XhPmeoCoz0c)$$ \nLoans are paid out in $STAR (Preon's USD-pegged stablecoin) with a minimum maintained collateral ratio of 110%. Preon accepts multiple token types as collateral, making $STAR available to a wide range of users. [\\[3\\]](#cite-id-3jzmerz7gil) \n \n## CDP \n \nA CDP (collateralized debt position), at its most basic level, is held when a user deposits collateral in a smart contract in order to generate stablecoins. CDPs allow users to take out loans against their own assets. A use case for this utility is when users do not wish to sell an asset but need or want additional funds to use elsewhere. [\\[4\\]](#cite-id-h0kt7phzd3) \n \n# $STAR \n \n$STAR is an over-collateralized [stablecoin](https://iq.wiki/wiki/stablecoin) backed by a 110% minimum collateral ratio. Loans are secured by always having more value locked than the amount of debt given out. Preon introduced a linear fee model in the minting process. Users do not pay the 8% borrow fee upfront. The fees are split & paid linearly over 6 months. [\\[5\\]](#cite-id-y8s1u2ozn17) \n*Disclaimer: These fees are subject to change in the future due to market conditions and/or other factors. [\\[5\\]](#cite-id-y8s1u2ozn17)* \n \n## Nebula Vaults \n \nNebula Vaults are [smart contract](https://iq.wiki/wiki/smart-contract) vaults that act as collateral in exchange for the ability to borrow $STAR. These vaults are the backing of the stablecoin and are used mainly to optimize the farming opportunities for all users in different ways. [\\[6\\]](#cite-id-w9yozvrpnst) \n \n## Tokenomics \n \n$PREON is the protocol’s main utility token powered by [LayerZero](https://iq.wiki/wiki/layerzero), giving users the ability to engage in secondary market activity, provide liquidity, and lock into $vePREON through the protocol’s veNFT contract. [\\[5\\]](#cite-id-y8s1u2ozn17) \n \n$PREON’s initial mint supply is 500,000,000 with an elastic supply due to being an emissions token. [\\[5\\]](#cite-id-y8s1u2ozn17) \n \n \n## $vePREON \n \n$vePREON is a receipt [NFT](https://iq.wiki/wiki/non-fungible-token-nft) for locking $PREON into the protocol’s veNFT contract for a time period between 1 week to 2 years. $vePREON holders are rewarded with the following: \n \n* One-time borrow fee (added to borrowers debt) \n* Repayment fee \n* Performance fee on collateral yield farming \n* Liquidation profits \n* Different revenue sources provided by the protocol [\\[6\\]](#cite-id-w9yozvrpnst) \n \n## $oPREON \n \n$oPREON is the emission token of Preon's Stability Pool. It is illiquid on its own, but can be zapped for $vePREON or redeemed using $STAR at a discount. The earned $STAR is used for the protocol in the form of incentives for $vePREON holders and is sent to the Treasury, where it is employed for various purposes. [\\[6\\]](#cite-id-w9yozvrpnst) \n \n
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