Superseed

Overview

Superseed is an Ethereum L2 built on the OP stack, purpose-built for DeFi with new primitives integrated at protocol level. Superseed’s differentiating factor is a new token concept called Supercollateral, which introduces self-repaying loans at the chain-level. Users can unlock liquidity without selling through collateralized loans, while simultaneously having these loans repaid through protocol-generated fees. One of the main drivers of this loan repayment is done via a new mechanism called Proof of Repayment (PoR).

At the core of the protocol mechanics is the SuperCDP, a native Collateralized Debt Position protocol, where users can mint an overcollateralized stablecoin (Superseed Stablecoin) by locking assets such as $ETH, $WBTC, or the Superseed governance token as collateral. Developed on the Superseed chain, primitives such as Supercollateral and Proof-of-Repayment subsequently enable users to borrow interest-free and have their loans repaid with fees sourced from ecosystem activity, including transaction profits, interest from non-native borrowers, and daily auctions. Hence, Superseed aims to align the incentives of both users and ecosystem protocols by creating a more capital-efficient and dynamic DeFi ecosystem that sets a standard through Dynamic Repayment Vaults.

Problem Statement

Superseed was created to address a fundamental global issue: debt. Many individuals face the overwhelming burden of rising debt, where loans taken out of necessity become a source of stress due to high interest rates. This debt model benefits corporate banks at the expense of individuals, creating a hard-to-escape cycle.

DeFi borrowers face two interlinked challenges. First, they incur ongoing interest costs and must actively manage repayments and collateral ratios, which introduces both financial drag and operational complexity. Second, the value generated by borrower activity—through interest payments, liquidation penalties, or protocol fees—accrues to lenders, token treasuries, or other third parties, rather than to the borrowers themselves, creating a misalignment of incentives between users and the protocols they rely on. Existing self-repaying models depend on external yield sources that fluctuate or dry up, whereas zero-interest platforms require borrowers to repay their principal manually. These solutions reduce part of the burden but fail to fully eliminate it or guarantee sustainable loan repayment.

A solution that solves these issues would be measured by:

• The proportion of borrowed principal automatically amortized by protocol revenues.
• Adoption rates among target users such as crypto holders seeking liquidity without asset sales.
• A demonstrable reduction in default and liquidation events, indicating improved borrower outcomes without added risk.

Value Proposition

Superseed wants to change the concept of debt by offering a blockchain solution that provides loans that repay themselves through fees generated across its ecosystem. This removes the need for users to bear the burden of repayment. Borrowers who lock Superseed’s governance token at a 500% collateralization ratio incur no interest and see their principal automatically amortize over time as protocol earnings flow into their CDP vaults.

The vision behind Superseed is to leverage its L2 to create a system where value flows are aligned for the benefit of all stakeholders, including borrowers. This approach creates a feedback loop: as network activity grows, more fees are generated, accelerating loan pay‑down for users, attracting more users to borrow and enter the ecosystem.

Technical Overview

Superseed comprises components establishing a self-repaying loan system as an Ethereum L2. The protocol incorporates a range of technical modules that enable this capability.

Supercdp Protocol

The SuperCDP Protocol is a core feature of the Superseed L2 chain. The protocol enables a decentralized, collateralized debt position (CDP) system, where users can lock assets as collateral to mint and borrow the Superseed stablecoin. This results in the SuperCDP Protocol serving as the liquidity hub for the Superseed ecosystem, allowing users to generate liquidity without relying on peer-to-peer lending markets.

In a CDP model, liquidity is generated directly from the collateral that users provide, i.e., a stablecoin is minted from overcollateralized assets backing it. The protocol supports various collateral types, including $ETH, $WBTC, and the Superseed governance token. Unlike traditional lending markets, where liquidity depends on pools of lenders, the SuperCDP structure is fully backed by the collateral supplied by users. Users who lock assets into the SuperCDP create a debt position by minting the Superseed stablecoin.

Collateralization Requirement

The SuperCDP Protocol imposes an overcollateralization requirement, which stipulates that the value of the locked collateral must exceed 150% of the stablecoin amount borrowed. This overcollateralization ratio ensures the stability of the stablecoin and mitigates risk within the protocol. The protocol triggers liquidation if the collateral value falls below this threshold.

Liquidation

Suppose a CDP fails to meet the required collateralization ratio; the protocol auctions off a portion of the collateral to cover the outstanding debt. The user incurs a penalty fee and loses part of their collateral.

Users must repay their debt to withdraw their collateral. Upon repayment or liquidation, the protocol burns the stablecoin associated with the debt, reducing the circulating supply. This mechanism ensures the system remains balanced by eliminating stablecoins from circulation as debts are resolved.

Interest Rates

The SuperCDP interest rates are governed by the Superseed community, providing a decentralized mechanism to manage the protocol’s financial health and stability. These interest rates influence the stability of the stablecoin, helping maintain its peg to the US dollar.

Supercollateral

Supercollateral loans are those in the system that maintain a collateralization ratio of 500% or higher. Users with Supercollateral loans will be automatically repaid without incurring interest charges. Initially, Superseed’s governance token will be the first token granted Supercollateral status.

The repayment will be sourced by the protocol through fees from:

• L2 sequencer net profits.
• Interest generated from loans backed by non-supercollateral assets within the SuperCDP protocol
• Revenue from Proof of Repayment.
• Revenue from native yield Staking bridge—users can choose between yield-generating and traditional bridge options.

This mechanism also increases the utility and demand for the Superseed governance token, as it is initially granted Supercollateral status.

Proof-of-repayment

Proof-of-Repayment (PoR) is a reward mechanism introduced by the protocol to incentivize loan repayment on the Superseed network.

Each day, an auction takes place where users can participate by committing stablecoins to repay the loans of borrowers who utilize Supercollateral. Participants compete to offer the highest amount of stablecoins, with the auction winner gaining rewards. The Superseed protocol allocates 2% of its total governance token supply annually as emissions to reward participants in the PoR auctions. The winner of the daily auction receives a portion of this token emission as a reward for their contribution to loan repayment.

The stablecoins committed by the auction winner are directed into the Dynamic Repayment Vault, where they are systematically applied to repay Supercollateral loans according to a predetermined schedule, effectively repaying users’ debts. If participants do not win the daily auction, they can reclaim the stablecoins they committed, ensuring that only the highest contribution is used daily for loan repayment. PoR is essential as it helps maintain the stability and sustainability of the Superseed ecosystem.

Dynamic Repayment Vault

The Dynamic Repayment Vault is a stabilization tool within the lending protocol primarily used to automatically repay loans taken with Supercollateral. They pool fees generated across the network and systematically apply them to repaying Supercollateral users’ loans.

The vault manages loan repayments using funds sourced from various activities:

• L2 Sequencer Fees: Earnings from the operation of the L2 sequencer.
• Interest from Non-Supercollateral Loans: Interest payments are collected from loans backed by assets without Supercollateral status.
• Contributions from PoR Auctions: stablecoins committed by the winners of the Proof-of-Repayment auctions. This accumulated liquidity is then applied to loan repayment.

The vault is designed to adjust the repayment rate dynamically based on available liquidity and protocol conditions. This flexibility minimizes repayment volatility, ensuring users receive consistent debt management support. The vault releases funds on a pro-rata basis according to a predetermined schedule, ensuring debt repayment is systematic and fair. By continually repaying Supercollateral loans, the vault also acts as a “sink” for the Superseed stablecoin, helping to remove it from circulation. This function supports the stablecoin’s peg by balancing supply and demand.

Superseed Stablecoin

The Superseed stablecoin is the protocol’s native stable asset, designed to hold a peg to $1. Users can mint the Superseed stablecoin by depositing supported collateral assets (e.g., $ETH, $WBTC, Superseed governance token) in the SuperCDP, creating an overcollateralized debt position. This ensures that the value of the collateral consistently exceeds the value of the minted stablecoin, providing a buffer against volatility.

All fees generated by the protocol are converted into the Superseed stablecoin, moved to the vault, and used to repay the debt of Supercollateral users. Superseed plans to integrate the stablecoin across its ecosystem and approved DeFi applications, using it as collateral within the protocol. This adoption helps lock up supply, increasing stablecoin demand. Beyond its internal use, the Superseed stablecoin serves multiple roles within the network:

• Debt-Tracking Mechanism: Keeps a record of outstanding debts within the protocol.
• Medium of Exchange: Facilitates transactions within the Superseed ecosystem.
• Stable Unit of Account: Provides a consistent value measure for users and applications.

The OP Stack

The OP Stack is the standardized, shared, and open-source development stack that powers Optimism, maintained by the Optimism Collective.

With the advent of the Superchain concept, it has become increasingly important for Optimism to efficiently support the secure creation of new chains that can interoperate within the proposed Superchain ecosystem. As a result, the OP Stack primarily focuses on creating a shared, high-quality, and fully open-source system for creating new L2 blockchains. By coordinating on shared standards, the Optimism Collective can avoid rebuilding the same software in silos repeatedly.

Although the OP Stack today significantly simplifies the process of creating Ethereum L2s, it’s important to note that this does not fundamentally define it. The OP Stack is all of the software that powers Optimism. As Optimism evolves, so will the OP Stack.

The OP Stack can be considered software components that help define a specific Optimism ecosystem layer or fill a module role within an existing layer. Although the current heart of the OP Stack is infrastructure for running L2 blockchains, the OP Stack theoretically extends to layers on top of the underlying blockchain, including tools like block explorers, message-passing mechanisms, governance systems, and more.

Layers are generally more tightly defined towards the bottom of the stack (such as the Data Availability Layer), but become more loosely defined towards the top of the stack (like the Governance Layer).

The Superchain

The Superchain is a network of blockchains, each built with Optimism’s OP Stack. By following a shared codebase and standards, every blockchain within the Superchain benefits from robust interoperability, shared security, and access to economic incentives like grants and public goods funding. The Superchain enables Ethereum-compatible chains to scale efficiently and securely, supporting projects with unified updates and tools.

As part of the Superchain, Superseed gains access to a broad, interconnected DeFi ecosystem with shared infrastructure benefits, including improved security, easy interoperability, and automated updates based on network-wide advancements. The unified OP Stack environment makes development easier and broadens Superseed’s reach across many blockchains, allowing it to connect with a broader user base. Superseed can also utilize economic incentives, such as grants, to drive innovation and growth. This integration aligns Superseed with Ethereum’s core values and enhances its capacity to provide advanced DeFi solutions over the Superchain network.

Target Market

Superseed operates at the convergence of two large crypto segments:

1. Ethereum Layer 2 Scaling: Offering an Optimistic Rollup that inherits L1 security while reducing transaction costs and congestion.
2. DeFi Lending & Stablecoins: Providing over‑collateralized borrowing and algorithmic stablecoin issuance.

Ethereum L2s and DeFi lending each represent multi‑billion‑dollar markets. By embedding a native CDP lending protocol into its L2, Superseed targets borrowers who are frustrated by high interest rates and manual debt management on existing platforms. Its integrated self‑repaying model appeals to any holder seeking onchain liquidity without selling assets, a subgroup that includes retail traders, DAO treasuries, and long‑term token stakers.

Growth will hinge on Superseed’s ability to convert L2 fee revenue into tangible loan forgiveness. If users see meaningful principal reduction, word‑of‑mouth and protocol‑level incentives can accelerate adoption. Integration into the broader Optimism ecosystem, plus potential partnerships with wallets and protocols, can amplify network effects.

Conversely, adoption may lag due to initial liquidity constraints, the complexity of the auction-driven repayment model, and $SUPR token volatility, which can impact collateral safety and auction participation.

Primary Users

Superseed can appeal to both individual participants and institutional actors.

Individual Participants

• Supercollateral Borrowers: Lock $SUPR tokens at a 500% collateralization ratio to access interest‑free, self‑repaying loans. Their incentive is clear: they avoid interest expense and see principal diminish automatically as protocol fees and auction proceeds flow into their CDP vaults. They accept higher collateral requirements in exchange for guaranteed debt amortization, betting that network growth and token stability will sustain repayments.
• Standard Borrowers: Pledge $ETH or $wBTC at a 150% ratio. They pay stability fees set by governance, but those fees still feed the repayment pool for $SUPR‑backed loans. Their participation subsidizes supercollateral borrowers, aligning incentives loosely through the shared benefit of a healthier ecosystem, even as they bear interest costs they might offset via Seeds rewards or future supercollateral status.
• Liquidity Providers & Traders: Supply capital to DEX pools (Velodrome, BulletX) and earn trading fees plus Seeds points—3× multipliers for SUPR pairs—to farm additional $SUPR. Their activity deepens liquidity, lowers slippage for borrowers, and earns them a share of the 150 million $SUPR allocated as rewards in Season 1.
• Auction Participants: Bid stablecoins daily in the Proof‑of‑Repayment auction to acquire newly minted $SUPR. Motivated by arbitrage, they convert stablecoin into $SUPR at a discount (relative to market price), while their bids directly fund borrower repayments.

Institutional Actors

• DAO Treasuries & Crypto Fund: Leverage Superseed to tap liquidity against large token holdings without relinquishing upside. By borrowing interest‑free or at competitive rates on $ETH and other assets, treasuries can fund operations, grants, or market‑making strategies, expecting that the protocol’s positive‑sum model—where fees bolster debt reduction—yields a net benefit over traditional money markets. Their scale magnifies fee generation, which in turn accelerates the self‑repayment mechanism for all users.

Across these archetypes, Superseed’s game theory aligns participants toward network growth: borrowers generate fee revenue that autoservices loans, LPs, and traders earn rewards while boosting liquidity, and auctioneers convert inflation into repayment capital. Institutional adoption further amplifies this cycle by bringing significant TVL and transactional activity, reinforcing Superseed’s core promise of a self‑repaying, community‑driven DeFi ecosystem.

Economic Design

Superseed’s economic design alters the traditional concept of debt by offering users self-repaying loans that automatically reduce their debt without incurring interest charges. The protocol can generate revenue and support its operational model by implementing the SuperCDP Protocol, Supercollateral, Proof-of-Repayment, and the Superseed stablecoin. This approach delivers value directly to users by allowing them to uniquely partake in the chain’s growth, with 100% of the profits generated by the system being redirected to repay users’ loans.

The protocol delivers value through the Superseed network, ensuring all fees and revenues are channeled back into the system to benefit users. Revenue streams such as L2 sequencer profits, interest from non-Supercollateral loans, revenue from Proof-of-Repayment auctions, and earnings from the native yield staking bridge are all directed into the Dynamic Repayment Vault. This vault systematically applies these funds to reduce the debts of Supercollateral users, ensuring that the benefits are directly experienced by the community rather than accruing to the protocol or outside investors.

The Superseed token is a significant part of the business model and is designed to prioritize the interests of users and the community. The tokenomics emphasize transparency, sustainability, and equitableaccess, rewarding active participants within the network. By avoiding traditional venture capital funding and high FDV, Superseed ensures that value is not concentrated among external investors. Instead, the token distribution empowers individual participants, especially those actively engaged in the onchain ecosystem. Token holders play a crucial role in governance, influencing protocol development and fostering a community-driven environment. This design ensures that the value generated remains within the ecosystem, enhancing the financial well-being of its users and promoting long-term engagement and contribution.

Revenue Sources

Superseed’s ecosystem generates revenue from multiple sources, all dedicated to automatically repaying the loans of Supercollateral users. The fees collected across the platform are converted into the Superseed stablecoin and used to reduce these users’ debt.

Sources of Revenue:

• L2 Sequencer Net Profits: Profits generated by the operation of the L2 sequencer are funneled into the repayment system.
• Interest from Non-Supercollateral Loans: Loans backed by assets that do not have Supercollateral status—such as $ETH and $wBTC—accrue interest within the CDP protocol.
• Revenue from Proof-of-Repayment: The Proof-of-Repayment mechanism involves daily auctions where participants commit stablecoins to repay the loans of Supercollateral borrowers. The stablecoins contributed by the auction winners are added to the repayment pool, and these participants are rewarded with governance tokens for their contributions.
• Revenue from Native Yield Staking Bridge: Users can utilize a yield-generating bridge when transferring assets into the Superseed ecosystem.

Fee Breakdown

Superseed is designed to be EVM equivalent, reusing Ethereum’s codebase and emulating its behavior. Despite this equivalence, there are some differences in transaction fees between Superseed and Ethereum. Understanding these differences is essential for accurately accounting for fees in your applications.

Tokenomics Breakdown

By moving away from traditional models reliant on VC backing, Superseed places the community first, giving them earlier access than most VC-backed projects. Without external pressures, the protocol can implement a token distribution system that puts users first, especially those actively engaged in the onchain ecosystem. This helps to avoid notable problems such as projects launching at high fully diluted valuations (FDV) and where the supply is concentrated in only a handful of insiders.

Distribution

Superseed has designed a distribution model focusing on community and developing a sustainable economic environment where growth is achieved through active engagement.

Supply Schedule

Superseed’s token unlock schedule is designed to prioritize Supersale participants by granting them early access to tokens at TGE without imposing any vesting or lock-up schedule. Other allocations follow vesting schedules to ensure a balanced and equitable distribution of tokens over time.

Superseed’s governance token has an initial supply of 10 billion tokens. Once the CDP platform becomes operational, the protocol will mint new tokens at a controlled annual inflation rate of 2% through the Proof-of-Repayment mechanism.

Superseed’s token inflation, set at a controlled 2% annual rate, supports the protocol’s growth and sustainability. This inflation is primarily distributed through the Proof-of-Repayment (PoR) mechanism, where a portion of newly minted tokens rewards participants who contribute stablecoins to repay Supercollateral loans. The goal is to incentivize participation in the ecosystem while ensuring sufficient liquidity for loan repayments.

The impact of this inflation is twofold. On the positive side, it drives active engagement by rewarding users, creating demand for governance tokens, and supporting the protocol’s self-repaying loan system. However, if not managed carefully, inflation could dilute token value, reducing incentives for long-term holders. To mitigate this, Superseed relies on strong utility for its token—through governance, staking, and integration into the protocol as a Supercollateral—to maintain demand and offset inflationary effects.

Governance

Governance is a central aspect of Superseed’s vision, emphasizing the importance of community involvement in the development of the protocol. An active and engaged community is crucial for driving the platform’s success. Governance will be facilitated through the Superseed token, enabling token holders to participate in decision-making processes that shape the protocol’s future.

Governance participants could decide how to distribute revenue sources (e.g., sequencer fees, interest from non-Supercollateral loans, and Proof-of-Repayment contributions). For example, they might vote to allocate a higher percentage of revenue toward specific use cases, such as debt repayment, ecosystem development, token buybacks instead of stablecoin buybacks, or other optimizations.

Risks & Safeguards

High Collateralization Requirements

While this is not necessarily a risk, Superseed requires a 500% collateralization ratio for interest-free loans. This is significantly higher than the industry standard, which may deter user participation, mainly if other DeFi platforms offer similar services at lower ratios. High collateralization requirements could also limit protocol adoption, especially among users with smaller portfolios or those seeking more accessible credit options. The self-repaying loan feature mitigates this risk to some degree.

Liquidation Risk

In the case of a market downturn, Supercollateral or other collateral assets may experience severe devaluation, making it challenging to liquidate enough collateral to cover debts. For example, the Superseed token has a Supercollateral status and is central to the operation. Any price disruptions and volatility could impose serious issues on Supercollateral positions. While the 500% ratio provides a buffer against volatility, the protocol’s heavy reliance on the Superseed token introduces risks that price drops could amplify. Hence, it is critical that enough liquidity exists onchain on liquidity pools in order to liquidate positions safely with as minimal price impact as possible.

Sequencer Centralization Risk

If the sequencer is centralized (as is familiar with newer L2s), Superseed could face centralization risks, such as single points of failure or influence over transaction ordering. Centralization could create vulnerabilities, especially if the sequencer becomes overloaded, compromised, or manipulated for transaction reordering. However, this is the trend among L2s, and verifiability remains decentralized, with all transactions being ultimately settled on the Ethereum mainnet.

In the event of a sequencer failure, users should be able to initiate withdrawals directly on the Ethereum mainnet, ensuring access to their assets. This process typically involves submitting a withdrawal request on L1, which, after a challenge period, allows users to reclaim their funds.

Incentive Risk

Participants in PoR auctions are motivated by the potential reward for governance tokens. Suppose the governance token holds value as a tradable asset or a means to influence protocol decisions. In that case, participants may view the auction as an opportunity to profit or gaininfluence. Essentially, they exchange their stablecoins for governancetokens, expecting the tokens to appreciate or provide meaningful utility.

If demand for the governance token diminishes (e.g., its price falls or users no longer value its governance utility), the incentive to participate in the auctions weakens. Without sufficient participants willing to commit stablecoins, the PoR system could fail to generate enough debt-burning resources, reducing the protocol’s ability to repay loans automatically. This dependency creates a vulnerability tied directly to the perceived value of the governance token.

FAQ

How does Superseed’s self-repaying loan mechanism work?

Superseed offers self-repaying loans through its Supercollateral system. Users who maintain a collateralization ratio above 500% have their loans automatically repaid without incurring interest charges. The repayment is sourced from various protocol fees, including L2 sequencer profits, interest from non-supercollateral loans, and revenue from the Proof-of-Repayment mechanism.

What is Supercollateral, and how does it benefit users?

Supercollateral refers to loans with a collateralization ratio above 500%. Users with Supercollateral loans benefit from automatic loan repayments without paying interest. Initially, the Superseed governance token is granted Supercollateral status, incentivizing users to maintain a high collateralization ratio and participate actively in the network.

How does the Superseed stablecoin function within the ecosystem?

The Superseed stablecoin is the protocol’s native stable asset, designed to maintain a peg to the U.S. dollar. Users mint the stablecoin by depositing supported collateral into the SuperCDP (Collateralized Debt Position) system. It serves as a medium of exchange, a debt-tracking mechanism, and a stable unit of account within the network.

How are the protocol’s revenue streams utilized?

All revenue generated across the Superseed ecosystem is channeled into repaying the loans of Supercollateral users.

Why should developers consider building on Superseed?

Developers are encouraged to build on Superseed due to its open-source, EVM-equivalent L2 infrastructure, which allows for seamless deployment of dApps using familiar Ethereum tools. Mechanisms like Supercollateral and Proof-of-Repayment open new design spaces for creating novel DeFi applications.

What if I don’t have 500% c-ratio?

If users don’t have a 500% c-ratio, they can still borrow and pay back the loans; they just can’t access the features of Supercollateral, which repays back the loans automatically.

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