DUSD Stablecoin

DUSD is DI Network's over-collateralized algorithmic stablecoin, serving as the base currency for all protocol operations and maintaining its $1 peg through robust collateralization mechanisms.

Overview

DUSD combines the stability of over-collateralization with the flexibility of algorithmic design:

Key Features

Stability Mechanism

  • Over-Collateralization: Minimum 125% backing

  • Oracle Pricing: Real-time collateral valuation

  • Liquidation Engine: Automated position management

  • Interest Rates: 5% APR encourages repayment

Multi-Collateral Support

  • DI Token: Primary collateral (75% factor)

  • WBTC: Bitcoin exposure (70% factor)

  • WETH: Ethereum exposure (70% factor)

  • USDT/USDC: Stable collateral (90% factor)

Cross-Chain Functionality

  • Native Deployment: Available on all 6 networks

  • Unified Supply: Same token across chains

  • Bridge Integration: Seamless cross-chain transfers

  • Gas Payments: Use DUSD for transaction fees

Core Functions

1. Stability Mechanism

Maintains $1 peg through over-collateralization and market mechanisms.

Stability Mechanism

2. Collateral Management

Comprehensive system for managing multiple collateral types.

Collateral Management

3. Interest Rate Model

Fixed 5% APR interest rate system with continuous accrual.

Interest Rates

4. Liquidation System

Automated liquidation engine protecting protocol solvency.

Liquidations

Use Cases

Trading Base Currency

  • Synthetic Assets: Mint xBTC, xETH, xAAPL with DUSD

  • Perpetual Trading: Use as collateral for leveraged positions

  • Spot Trading: Direct trading pairs with synthetic assets

Cross-Chain Operations

  • Bridge Currency: Transfer value between networks

  • Gas Payments: Pay transaction fees across all chains

  • Liquidity Provision: Provide liquidity in various pools

DeFi Integration

  • Lending: Lend DUSD in external protocols

  • Yield Farming: Participate in yield farming opportunities

  • Arbitrage: Exploit price differences across chains

Economic Model

Supply Dynamics

Revenue Generation

  • Interest Payments: 5% APR on all borrowed DUSD

  • Liquidation Penalties: 5% bonus on liquidated positions

  • Trading Fees: Indirect revenue from synthetic trading

Peg Maintenance

  • Arbitrage Opportunities: Price deviations create profit opportunities

  • Protocol Reserves: Emergency reserves for peg defense

  • Market Making: Automated market making for stability

Risk Management

Collateral Risk

  • Diversification: Multiple collateral types reduce concentration risk

  • Conservative Ratios: Lower collateral factors provide safety buffer

  • Oracle Security: Dual oracle system prevents price manipulation

Systemic Risk

  • Over-Collateralization: System-wide collateral exceeds DUSD supply

  • Liquidation Engine: Automated risk management

  • Insurance Fund: Protocol reserves for extreme scenarios

Integration Examples

Basic DUSD Operations

Position Management

Monitoring & Analytics

Key Metrics

  • Total Supply: Current DUSD in circulation

  • Collateralization Ratio: System-wide backing ratio

  • Peg Stability: Price deviation from $1.00

  • Interest Accrued: Total outstanding interest

  • Liquidation Rate: Frequency of position liquidations

Health Indicators

  • System Health: >150% collateralization (healthy)

  • Peg Stability: <2% deviation from $1.00

  • Liquidation Frequency: <1% daily (stable)

  • Interest Coverage: Sufficient reserves for operations

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