What is $USDu

$USDu is a next-generation stablecoin designed to bring deep liquidity and yield-backed stability to the decentralized finance ecosystem. It is a yield-collateralized stablecoin, fully backed by on-chain lending income from credit-rated markets. The protocol itself mints $USDu exclusively against productive collateral, creating a stablecoin that is both capital efficient and inherently sustainable.

Unlike traditional stablecoins that rely on static collateral or user minting, $USDu follows a protocol-minting model. This ensures that every $USDu in circulation is backed by verifiable, yield-generating assets. The result is a more robust, transparent, and scalable stablecoin optimized for a wide range of DeFi applications.

The primary purpose of $USDu is to serve as a liquidity layer for the next generation of yield-bearing stablecoins and other DeFi assets. By offering a low-cost borrowing and lending vehicle, $USDu enables protocols and traders to perform advanced strategies such as recursive lending, long and short positions, and yield arbitrage, all while maintaining strong risk management and on-chain transparency.

$USDu combines principles of sound financial engineering with a DeFi-native design, allowing it to act as core infrastructure for the future of stablecoins and yield-bearing markets.