Descent protocol works by allowing people borrow Dollar Backed Currency Notes (DBCN) like xNGN against any collateral asset.

Borrowing

1. Create and Collateralize a Vault A user creates a Vault (Collateral Debt Position or CDP) and funds it with USDC and amount of collateral that will be used to generate xNGN. Once funded, a Vault is considered collateralized.

2. Generate xNGN from the Collateralized Vault The Vault owner initiates a transaction, and then confirms it in her non-custodial wallet in order to generate a specific amount of xNGN in exchange for keeping her collateral locked in the Vault.

Paying Back

1. Pay Down the Debt and the Stability Fee To retrieve a portion or all of the collateral, a Vault owner must pay down or completely pay back the xNGN she generated, plus the Vault Fee that continuously accrues on the xNGN outstanding. The Vault Fee can only be paid in xNGN.

2. Withdraw Collateral With the xNGN returned and the Vault Fee paid, the Vault owner can withdraw all or some of her collateral back to her wallet. Once all xNGN is completely returned and all collateral is retrieved, the Vault remains empty until the owner chooses to make another deposit.

Who controls the system?

Inside the Descent ecosystem, the native $DSN token allows token holders to influence certain aspects of the protocol such as:

• What should the be the annual borrowing fee be (stability fee)?
• How much collateral should be backing each Vault (collateralization ratio)?
• Shutting down the protocol in the case of a flash crash of the value of USD/NGN or any other unforeseen situation (emergency shutdown)?