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

import { DINetwork } from '@dinetwork/sdk';

const di = new DINetwork({ chainId: 1, provider: window.ethereum });

// Check borrowing capacity
const capacity = await di.dusd.getBorrowingCapacity(userAddress);

// Mint DUSD with DI collateral
await di.dusd.mint({
  collateralToken: 'DI',
  collateralAmount: ethers.parseEther('1000'),
  dusdAmount: ethers.parseEther('750')
});

// Repay DUSD
await di.dusd.repay(ethers.parseEther('750'));

Position Management

// Check position health
const position = await di.dusd.getPosition(userAddress);
const healthFactor = await di.dusd.getHealthFactor(userAddress);

// Add collateral
await di.dusd.addCollateral('DI', ethers.parseEther('500'));

// Partial repayment
await di.dusd.repay(ethers.parseEther('100'));

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