How USD* works
USD* is fully collateralized by a diversified portfolio of yield-generating assets and positions. Currently, yield is sourced from three main categories:
Delta-neutral hedged positions on centralized and decentralized exchanges (e.g., BTC, ETH, SOL)
Secured borrow-lend market positions involving on-chain stablecoins
Stablecoins, such as USDC and USDT
All USD* holders share proportional exposure to the performance of the aggregated portfolio. Yield is auto-compounded into the value of each token — no staking or claiming is needed.
Strategy Pools
Yield is generated by actively managed strategy pools, each corresponding to a distinct type of asset or yield source. These include:
Token reserves: e.g. idle USDC/USDT
Lending positions: on-chain borrow-lend protocols
Hedged strategies: e.g. delta-neutral positions capturing funding rates
These strategy pools are modular and continuously rebalanced to optimize for risk-adjusted returns.
How Yield Is Tracked
The system uses an internal accounting model to calculate the Net Asset Value (NAV) of the overall USD* portfolio. This ensures that:
Each USD* token reflects its fair share of the yield
Users do not need to interact with individual strategies
As a result, users simply hold USD* in their wallet while the system handles yield generation and rebalancing in the background.
The yield earned by a USD* holder is proportional to their share of the total USD* supply and the total yield distributed during the holding period.
Minting and Redemption
Minting: Users mint USD* by depositing accepted tokens such as USDC.
Redemption: Users can redeem by redeem USD* for USDC.
Market alignment: The protocol relies on arbitrage (by the team and whitelisted keepers) to ensure USD* trades close to NAV. Premiums trigger mint-and-sell actions; discounts trigger buy-and-burn.
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