Indigo Proposes Cashback for Cardano Loans and iUSD Swaps

Indigo has proposed a cashback program for users of its Cardano lending and PSM swap services. Announced on September 22, the plan would use the average amount of INDY staked over one month to determine eligibility for two separate rebates.

How the Two Cashback Rebates Would Work

The first rebate would return a portion of interest accrued on an active Indigo loan. The second would cover part of the fees paid through PSM, Indigo’s swap module for its synthetic dollar. Both minting and redemption are included in the published examples.

The entry threshold is an average stake of 10,000 tokens during the monthly calculation period. Indigo has provided one detailed tier: with 50,000 staked tokens, an eligible user could receive 10% of loan interest up to $50 per month, plus 50% of PSM fees up to a separate $50 monthly limit.

These are limits per account, rather than per loan or transaction. At the 7.5% annual interest rate used in Indigo’s illustration, approximately $80,000 in debt would generate enough interest to reach the $50 interest rebate limit. At the example PSM fee rates, reaching the separate $50 swap rebate would require $20,000 in minting volume or $10,000 in redemption volume.

How Cashback Fits Indigo’s Cardano DeFi Model

Indigo lets Cardano users deposit collateral, open debt positions and mint synthetic assets. Its governance token already gives stakers access to protocol benefits. The proposed cashback would add a benefit connected to the costs of using its lending and swap services.

The protocol moved away from new token emissions in July. Under the proposed design, cashback would be calculated from interest and fees a qualifying user actually paid. Existing staking distributions would continue separately.

Loan interest rates and PSM fees would still be charged under their existing terms. Indigo describes the rebate as a retrospective payment at the end of the applicable period, rather than a change to the rate charged when a loan is opened or a swap is made.

Monthly Eligibility and Payment Details

Indigo has published the minimum average stake and the example for 50,000 tokens, but not a complete table of tiers. It has not specified how the monthly average would be measured, which asset would be paid out, where the rebate funding would come from or whether users would need to claim payments. A rollout date and formal DAO vote have not been announced.

The method for calculating average stake is particularly relevant to users whose balances change during a month: it will determine which tier and account-level limits apply to their borrowing and PSM activity.