🧾 Stablecoin Mechanics Study

This project focuses on studying the internal mechanics of stablecoins, from both technical and economic perspectives. It analyzes key mechanisms such as collateralization, minting, liquidation, and price stability across different types of stablecoins.

📌 Purpose

To explore and understand how stablecoins operate at the smart contract level — especially under stress conditions such as price drops, liquidations, and collateral volatility.

🔍 Overview

• Smart contract implementation to simulate collateral-backed stablecoin systems
• Calculation of critical metrics such as:
  • healthFactor
  • liquidationBonus
  • collateralToDebtRatio
• Simulation of extreme volatility and risk scenarios
• Case studies: ETH, WLD, and highly volatile tokens (e.g. shitcoins)
• Integration with utilities like FixedPointMathLib from Solady

🛠 Technologies Used

• Solidity 0.8.27
• Foundry
• Solady (FixedPointMathLib)
• Markdown documentation

📂 Project Structure

contracts/
  └── StablecoinManager.sol
scripts/
  └── scenarios/
test/
  └── liquidation.t.sol
README.md

📈 Simulated Scenarios

• Moderate price drops (~25%–45%)
• Black swan events (~>40% drops)
• Comparisons between ETH and highly volatile tokens

📖 Notes

This is not a production-grade stablecoin implementation.
The goal is to analyze and document how stablecoins work, the risks they face, and the key thresholds that govern their solvency and liquidation logic.