Overview
Indigo Protocol lets people create tokens that track the price of other assets, like the US dollar (iUSD), Bitcoin (iBTC), or Ether (iETH), by locking up ADA as backing. You open a position, deposit ADA, and mint a tracker token against it. Think of it like a locked deposit box at a bank. You put valuables inside, you take out a receipt that represents their value, and you redeem the receipt to get your valuables back. If the value of your ADA drops too low, the position can be closed automatically to keep the system stable1.
Indigo runs on Cardano, with its rules written into automated code that anyone can inspect. The protocol is governed by holders of the INDY token through the Indigo DAO, a community-run decision body where token holders vote on protocol changes. It operates under the stewardship of the Indigo Foundation.
Key Features
- Mint tracker tokens backed by ADA. You lock ADA and mint iAssets such as iUSD, iBTC, and iETH that follow the price of real-world references, without moving your funds to another blockchain or handing them to a middleman1.
- Earn yield by helping the system stay solvent. People who park their tracker tokens in a stability pool absorb risky positions when they get closed, and in return they receive the discounted ADA backing plus rewards in INDY. This gives both yield and a safety net for the whole system2.
- Vote on the protocol with INDY. Holders of the INDY token vote on settings, treasury spending, and upgrades through an on-chain governance forum. The total supply is capped at 35 million tokens3.
- Open-source trade router for Cardano. Dexter, an open-source TypeScript library maintained by the Indigo team, finds the best route across multiple Cardano exchanges and is used by other DEX aggregators and apps.
- Two completed outside audits. Tweag reviewed Indigo's V1 automated code in 2021, and MLabs audited the protocol in 2022. A V2 audit by MLabs was funded through Project Catalyst Fund 1145.
What to Expect
You connect a Cardano wallet, like Lace or Eternl, at app.indigoprotocol.io and land on a dashboard showing your portfolio, open positions, and any active deposits. Opening a position takes a few clicks. Pick the tracker token to mint, deposit ADA as backing, and choose how much to mint while staying above the minimum backing ratio.
From there, the same app handles everything else. You can stake INDY for governance rewards, deposit into the stability pools, swap tracker tokens through the trading interface, and vote on open governance polls. Documentation lives at docs.indigoprotocol.io with separate guides for opening positions and for stability pools. The public governance forum is the place to track proposals and discussion.
