What Is the Role of Collateralized Debt Positions (CDPs) in Generating Network Activity (PQ)?

CDPs, where users lock collateral to mint a stablecoin or borrow assets, generate significant network activity (PQ) by creating debt and facilitating stablecoin transactions. The native token's value accrues if it is required as collateral, used to pay stability fees, or if the protocol's governance token controls the CDP parameters.

The total value of assets locked in CDPs is a key driver of the protocol's economic utility and thus its PQ.