Minting & Redemption

• Protocol-minted $USDu Only the protocol can mint new $USDu, based on productive, yield-bearing collateral. Users themselves cannot mint $USDu.

• How users get $sUSDu

  • Users acquire $USDu from secondary markets or partner protocols.

  • They deposit $USDu into a $USDu Lending Vault.

  • In return, they receive $sUSDu, a non-rebasing, yield-generating vault token.

• How Redemption works

  • Users can redeem either $USDu or $sUSDu at any time, as long as there is sufficient liquidity in the vault.

  • If all liquidity is borrowed, the interest rate model dynamically increases:

    • Yield on $sUSDu rises automatically to compensate depositors.

    • High interest incentivizes borrowers to repay their loans.

    • If borrowers do not repay and exceed allowed LTV, the system liquidates their position to restore vault liquidity.

• Built-in stability The dynamic rate model ensures that:

  • Yield adjusts in real time based on vault utilization.

  • Liquidity pressure is self-correcting through market incentives and automated liquidations.

• No staking, no lockups Users maintain flexibility at all times with simple deposit and withdrawal mechanics.