Conceptual Overview
USD* is a income–backed synthetic stablecoin built on the protocol that manages multiple vaults, each supporting different types of yielding tokens, with automated price feeds and risk management controls, offering diversified risk exposure and sustainable yield.
The design emphasizes two critical constraints:
Versatility: The system can add new collateral types and yield sources over time without breaking existing architecture.
Redundant Collateralization Checks: Every operation is validated against multiple layers of checks to protect against oracle manipulation, operational errors, or systemic failures.
USD* evolves from its predecessor (minted at BenJy1n3WTx9mTjEvy63e8Q1j4RqUc6E4VBMz3ir4Wo6) into a more robust, modular framework (minted at star9agSpjiFe3M49B3RniVU4CMBBEK3Qnaqn3RGiFM). The stablecoin is now backed by up to sixteen vaults, each storing a single asset type. A unified accounting layer aggregates all vault values and enforces collateralization consistency before and after every transaction.
Core Objects: Bank and Vault Structure
Moving from metaphor to implementation, the USD* smart contract creates bank accounts, each of which may contain up to sixteen vaults. Conceptually, each bank corresponds to a unique stablecoin instance; in the current deployment, a single bank powers USD*.
Each vault holds exactly one type of asset. Alongside every vault, two additional accounts are maintained:
Oracle Account – Manages the reporting of price changes and builds consensus among the oracle set.
Team Account – Records protocol fees captured during mint and burn operations, as well as deposits or withdrawals made by the team under certain vault types.
This layered structure allows vaults to remain both modular and accountable. The system can expand collateral types by simply adding a new vault without modifying the entire contract.
Accounting Layer
Acts as the “book” that records balances in raw units and USD values.
Ensures that the total value of assets across vaults always covers — and usually exceeds — the total supply of USD*.
Before and after every operation, the accounting layer validates consistency.
Oracle Layer
The integrity of USD* rests heavily on accurate and reliable price data. Asset prices are the foundation of collateral valuation and must be both trustworthy and efficient to ensure stability. The USD* smart contract is designed to integrate up to ten independent oracles, each responsible for broadcasting prices for the assets stored in a given vault.
Consensus follows a unanimity model: all active oracles must report the same price within a tolerance of less than one basis point (1bp). Only under this condition is a new price accepted as valid for that vault’s asset. This conservative approach ensures that malicious or faulty price updates are rejected before they can affect the collateralization layer. For legacy USD* vaults, price updates are additionally constrained, with a maximum step size of ten basis points (10bps) per update.
In its initial configuration, two oracles are operated by two independent team members on separate machines. This physical and organizational separation reduces the possibility of collusion or coordinated misreporting. As the oracle set expands, further decentralization will enhance both resilience and transparency. A planned safeguard is to prohibit acceptance of minting or deposit transactions if the associated fee is reported at less than one basis point, further mitigating economic manipulation risks.
Up to 10 oracles can broadcast prices per vault.
Consensus requires unanimity within 1bp tolerance.
Price changes are capped (e.g., 10bps per update for legacy USD* vaults).
Initial deployment: 2 independent team-managed oracles on separate machines to prevent collusion.
Guardrails and Security
Security is reinforced by both on-chain and off-chain mechanisms. On-chain, circuit breaker functions exist at both the vault and bank levels. These can halt activity in response to irregularities, ensuring that no unstable or invalid state is propagated through the protocol.
Complementing these are off-chain monitoring services that verify the adequacy of collateralization. If discrepancies are detected—for example, if the reported total value of vaults diverges from oracle consensus—the circuit breaker can be triggered to freeze either the affected vault or the entire bank. This layered defense ensures users remain protected against manipulation, technical failure, or systemic breakdown.
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