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Cat-in-a-Box Finance

A Dynamic Lending protocol for yield-bearing assets.


The Cat-in-a-Box protocol is built on liquid staking derivatives, initially using ETH proof-of-stake and stETH issued by Lido Finance as the main building block on launch with support for more assets in the future.

The aim of the protocol is to enable enhanced utility for yield bearing token holders, offering additional options to those with a long term outlook on staked tokens.

By depositing yield bearing tokens in Cat-in-a-Box, this deposit is used as collateral to mint and borrow a synthetic at a 1:1 ratio. Users have access to a broad LTV which can be minted against their deposit.

The yield bearing asset deposited in the protocol continues to earn yield. The yield can be used to pay back any loans or compound their yield bearing token deposit balance.

Cat-in-a-Box also offers a new paradigm for trading their yield bearing asset (such as stETH). User’s can sell with more benefits than typical market selling. See Selling with Benefits for more information.

A main feature of the Cat-in-a-Box dynamic lending protocol is to reward good borrowing habits and to discourage over-leveraging. This dynamic forms the self-stabilising nature of the protocol - it underpins liquidity pools to support the peg of the synthetic borrowable asset.

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View the explainer video here.

Governance minimised

The development team behind this DeFi protocol, taking the learnings from DeFi summer, decided against distributing a governance token due to security and centralisation risks.

More complex and upgradable contracts open themselves to a much wider set of attack vectors and human error. Hence, we have decided to go with a set-and-forget immutable contracts.

To mitigate these risks, the admin has access to only two parameters: a one-way switch to permanently disable whitelisting of MEV bots, and a gauge to set the protocol fee which will be automated as soon as enough data to set the range in a self-governing way is established.