Defrost Finance is a decentralized protocol designed to let you use liquidity pool (LP) tokens and other tokens from a range of Avalanche and cross-chain protocols as collateral to mint H2O, a soft-pegged stablecoin built for the Avalanche ecosystem. Defrost Finance aims to help users make better use of capital that would otherwise sit inside pools or vaults. The platform also enables liquidity providers to earn more through functions like farming, borrowing, staking, swapping, and bridge support for smoother trading.

Defrost Finance introduces the stablecoin H2O, backed by pre-existing collateral with an established history for value and stability. Users can create H2O by depositing collateral such as liquidity provider tokens from AMM (automated market maker) dexes (decentralized exchanges), lending assets, and other DeFi protocol tokens.

MELT powers voting power within Defrost governance. Held as a governance token, MELT holders participate in votes that determine updates to Defrost Finance Protocol settings, including collateral types, Stability Fees, the H2O savings rate, liquidity mining incentives, minimum collateral rate, and more.