About Gravita

Bhim5551

"Gravita is a fork of Liquity that accepts various LSD products as collateral. It allows users to borrow without interest and does not take a cut from the earnings generated by the deposited LST. The redemption mechanism was not activated in the initial stages but is gradually being released throughout the process. This might be the reason why $GRAI has maintained its value around $0.98 from the beginning, which undoubtedly raises trust issues among users.

Here are my views on $GRAI:

1. Lack of Innovation: As mentioned, Gravita is a fork of Liquity with not much innovation, so it might be easily surpassed with the introduction of Liquity v2 that utilizes LST.

2. Limited Value Proposition Compared to Competitors: Users can borrow GRAI without paying interest fees, allowing them to leverage their ETH holdings. Additionally, allowing $bLUSD as collateral with no liquidation risk and no fees on pledged earnings is the value proposition that Gravita offers.

3. Not a Medium of Exchange: GRAI is a yield-bearing stablecoin, and the protocol doesn't prioritize using it as a medium of exchange. Most users hold GRAI to benefit from its high annual yield.

4. Anchored Stability: The price of GRAI has been fluctuating around $0.98 since its launch. This could be because redemptions were not allowed during the launch, and gradual releases may have resulted in oversupply, driving down the price without arbitrage opportunities. Additionally, low liquidity and a lack of use cases to create organic demand may limit the growth in demand for $GRAI, exacerbating the situation.

5. Yield-Bearing Asset: Since GRAI can generate income for holders, there will likely be demand to use it as a store of value. If users trust its anchored stability, it can be a good way to earn ETH yields.

6. Multiple LST Collateral: There are several LST options available as collateral, such as WETH, rETH, wstETH, and bLUSD. This can be an advantage, providing users with multiple opportunities.

7. Lack of Capital Efficiency: The overcollateralization model limits the capital efficiency of $GRAI, as users need to deposit more funds than they receive. Additionally, there is always a liquidation risk, which will limit its growth."