Protocol Minting

• Only protocol can mint $USDu

  • $USDu is a protocol-minted stablecoin.

  • Regular users cannot mint $USDu themselves.

  • New $USDu is only created when the protocol mints it against verified yield-bearing collateral in credit-rated vaults.

• Minting process

  • The protocol acquires yield-bearing positions in credit-rated markets.

  • Based on strict risk models and LTV limits, $USDu is minted against these positions.

  • All minted $USDu is fully backed by productive, on-chain lending positions.

• Controlled issuance

  • $USDu supply grows only when the protocol identifies sufficient, safe lending opportunities.

  • This ensures that $USDu is always overcollateralized and sustainable.

• No user-based minting

  • Users cannot arbitrarily mint $USDu by depositing volatile assets or stablecoins.

  • This avoids risks of bad debt, misspriced collateral, or governance attacks.

• Protocol-owned liquidity

  • The protocol or governance cannot freely transfer or move $USDu once minted.

  • To provide liquidity in major markets such as Curve or lending protocols, governance must first approve and deploy a new minting module.

  • These modules allow the protocol to mint $USDu directly into approved pools in return for pool share tokens held by the protocol.

  • This ensures full transparency, immutability of core $USDu design, and strong on-chain governance oversight over liquidity deployment.

• Resulting benefits

  • Strong supply discipline and risk control.

  • $USDu retains high confidence as a yield-backed and overcollateralized stablecoin.

  • No dilution of user yield through inflationary emissions.