{"id":"inter-protocol","version":1,"language":"en","title":"Inter Protocol","hidden":false,"content":"**Inter Protocol** is a [decentralized finance](https://iq.wiki/wiki/defi) (DeFi) system designed to create and manage IST (Inter Stable Token), a [cryptocurrency](https://iq.wiki/wiki/cryptocurrency)-backed stable token pegged to the US dollar. Developed on the Agoric blockchain, Inter Protocol aims to provide a stable asset for the interchain ecosystem while serving as the native fee token for the Agoric platform. [\\[1\\]](#cite-id-qau3hs228o)[\\[2\\]](#cite-id-2jqdkvx30f)  \n  \n# Overview  \n  \nInter Protocol consists of a set of [smart contracts](https://iq.wiki/wiki/smart-contract) deployed on the Agoric blockchain that manage the [minting](https://iq.wiki/wiki/minting), [burning](https://iq.wiki/wiki/token-burn), stability mechanisms, and [governance](https://iq.wiki/wiki/governance-tokens) of IST. The protocol is designed to maintain IST's parity with the US dollar through various mechanisms, including over-collateralization and [liquidation]() processes. [\\[2\\]](#cite-id-2jqdkvx30f)  \n  \nKey features of Inter Protocol include over collateralized stable token (IST), Native fee token for the Agoric chain, Interoperability with the IBC (Inter-Blockchain Communication) ecosystem, Multiple minting mechanisms, including Vaults and Parity Stability Module (PSM), Decentralized governance through BLD token holders, and the the Economic Committee (EC) which plays a significant role in managing the protocol.[\\[2\\]](#cite-id-2jqdkvx30f)[\\[14\\]](#cite-id-brmngt07lst)  \n  \n# Key Components  \n  \n## IST (Inter Stable Token)  \n  \nIST is the primary product of Inter Protocol, designed to maintain a 1:1 peg with the US dollar. It serves several purposes within the Agoric ecosystem including a stable medium of exchange, fee token for transactions on the Agoric chain, and [collateral]() for [DeFi](https://iq.wiki/wiki/defi) applications. [\\[3\\]](#cite-id-vaikagbopaa)  \n  \n## Vaults  \n  \nVaults are a core feature of Inter Protocol, allowing users to mint IST by locking up collateral assets. Key aspects of Vaults include:  \n  \n* Over-collateralization: Users must provide more collateral value than the amount of IST minted  \n* Support for multiple collateral types, including [ATOM](), stATOM, stkATOM, stOSMO, and stTIA. [\\[13\\]](#cite-id-jnapke6hbff)  \n* Liquidation mechanism to maintain system solvency[\\[4\\]](#cite-id-lqawt3hp69e)  \n  \n## Parity Stability Module (PSM)  \n  \nThe Parity Stability Module has two primary functions:  \n  \n1. wantMinted - user gives PSM the accepted external stable token; PSM mints IST and gives it to the user  \n2. giveMinted - user gives IST back to the PSM, which is burned; PSM returns the external stable token  \n  \nOnce the user has received IST, they will transfer it to an external chain over the Inter Blockchain Communication (IBC) protocol. [\\[14\\]](#cite-id-brmngt07lst)[\\[15\\]](#cite-id-7c95s8jrftk)[\\[16\\]](#cite-id-36gi2vbfevl)  \n  \n## Liquidation Auctions  \n  \nTo manage risk and maintain the protocol's stability, Inter Protocol implements a liquidation system:  \n  \n* Dutch auction model for collateral liquidation  \n* Allows users to bid directly for assets in multiple ways  \n* Helps maintain the overall health of the protocol[\\[5\\]](#cite-id-7c88nl18wcn)  \n  \n## Oracle Network  \n  \nInter Protocol relies on a decentralized [oracle]() network to provide accurate price feeds:  \n  \n* Led by Simply [Staking]() and other experienced oracle [node]() operators  \n* Uses [Chainlink's](https://iq.wiki/wiki/chainlink) model and software, adapted for Agoric's framework  \n  \n## Reserve  \n  \nThe Reserve acts as a central component of Inter Protocol that holds additional over-collateralizing assets, manages to account for the protocol, and provides an emergency fund to cover shortfalls in major liquidations or extreme market volatility. [\\[6\\]](#cite-id-icky82k9q2)  \n  \n## Economic Committee  \n  \nThe Economic Committee (EC) plays a crucial role in managing the protocol. It consists of crypto, TradFi, economic, and FinTech experts, it is delegated by BLD token holders, and it manages the technical-economic parameters of IST. [\\[7\\]](#cite-id-dkojapoeqm9)  \n  \n## Governance  \n  \nInter Protocol is governed by Agoric BLD token stakers. Key aspects of governance include:  \n  \n* BLD token holders can vote on key governance proposals  \n* Staking BLD tokens grants voting rights  \n* Decisions can impact protocol parameters, upgrades, and other critical aspects[\\[7\\]](#cite-id-dkojapoeqm9)  \n  \n# Tokenomics  \n  \n## BLD Token  \n  \nBLD is the [governance token]() for the Agoric ecosystem, including Inter Protocol. Its primary functions are:  \n  \n* Voting on governance proposals  \n* [Staking](https://iq.wiki/wiki/staking) to secure the network  \n* Potential for other utility within the Agoric ecosystem[\\[8\\]](#cite-id-ts67v48v2r)[\\[9\\]](#cite-id-p2e7zyb435)  \n  \n## IST Token  \n  \nIST serves as:  \n  \n* A stable asset within the Agoric and broader IBC ecosystem  \n* The native fee token for transactions on the Agoric chain  \n* A potential building [block]() for other DeFi applications[\\[10\\]](#cite-id-uw3gp78sg9p)[\\[11\\]](#cite-id-cc6ants54fn)  \n  \n# Use Cases  \n  \nIST and Inter Protocol have several potential use cases within the Agoric and broader IBC ecosystem:  \n  \n* Stable medium of exchange for [decentralized applications](https://iq.wiki/wiki/decentralized-application)  \n* Collateral for other DeFi protocols  \n* Fee payment for transactions on the Agoric chain  \n* [Liquidity provision](https://iq.wiki/wiki/liquidity-providers) in [decentralized exchanges](https://iq.wiki/wiki/decentralized-exchange)  \n  \n# Partners  \n  \n* [Osmosis](https://iq.wiki/wiki/osmosis-osmo)  \n* Crescent  \n* Shade  \n* Omniflix  \n* Kado  \n* Squid  \n* Umee[\\[12\\]](#cite-id-nc4wu9l25hd)","summary":"Inter Protocol is a decentralized finance protocol on the Agoric chain, minting the stable token IST, designed for the interchain ecosystem.","categories":[{"id":"defi","title":"Decentralized Finance"}],"promoted":0,"tags":[{"id":"Protocols"}],"metadata":[{"id":"references","value":"[{\"id\":\"qau3hs228o\",\"url\":\"https://inter.trade/\",\"description\":\"website\",\"timestamp\":1727711883717},{\"id\":\"2jqdkvx30f\",\"url\":\"https://docs.inter.trade/\",\"description\":\"docs \",\"timestamp\":1727711884255},{\"id\":\"vaikagbopaa\",\"url\":\"https://docs.inter.trade/user-how-to/ist-usage-and-beyond\",\"description\":\"IST Usage & Beyond\",\"timestamp\":1727876658783},{\"id\":\"lqawt3hp69e\",\"url\":\"https://docs.inter.trade/inter-protocol-system-documentation/vaults\",\"description\":\"Vaults\",\"timestamp\":1727876698197},{\"id\":\"7c88nl18wcn\",\"url\":\"https://docs.inter.trade/inter-protocol-system-documentation/liquidation-auction\",\"description\":\"Liquidation Auction\",\"timestamp\":1727876732338},{\"id\":\"icky82k9q2\",\"url\":\"https://docs.inter.trade/inter-protocol-system-documentation/liquidation\",\"description\":\"liquidation\",\"timestamp\":1727876922090},{\"id\":\"dkojapoeqm9\",\"url\":\"https://docs.inter.trade/inter-protocol-system-documentation/protocol-and-chain-governance#the-economic-committee\",\"description\":\"The Economic Committee\\n\",\"timestamp\":1727876963518},{\"id\":\"ts67v48v2r\",\"url\":\"https://www.coingecko.com/en/coins/agoric\",\"description\":\"coingecko - 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