> For the complete documentation index, see [llms.txt](https://usdu.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://usdu.gitbook.io/docs/economics-and-incentives/incentive-programs.md).

# Incentive Programs

USDU Finance strategically reinvests protocol-generated income to accelerate ecosystem growth and liquidity depth. The incentives are not funded by user fees but by actual lending revenue captured by the protocol through governance-approved minting modules.

**Incentive Program Types:**

* **Liquidity Incentives**\
  Protocol income is used to provide incentives (such as bribes) to Curve, Morpho, and other key DeFi markets. This deepens $USDu liquidity and ensures efficient on-chain markets.
* **Borrowing Incentives**\
  When needed, protocol revenue can subsidize borrowing rates for $USDu in supported lending markets. This allows certain positions to even achieve negative net borrowing costs, encouraging demand and usage of $USDu.
* **Partnership Incentives**\
  $USDu works with other stablecoin protocols, DAOs, and DeFi projects to co-incentivize liquidity pools and lending pairs, helping other projects bootstrap liquidity while driving $USDu adoption.

**Design Principles:**

* Incentives are entirely **organic**, funded from lending yield that protocol-owned positions earn.
* The goal is not to create artificial demand but to support genuine market growth with sustainable incentives.
* Incentives are flexible and directed via **governance-approved programs**.

**Resulting Benefits:**

* Stronger liquidity for $USDu and its trading pairs
* More attractive markets for both borrowers and lenders
* Broader adoption across DeFi lending and trading ecosystems