Depeg Risk

$USDu is designed in a way that fundamentally prevents a depeg event.

• Protocol-minted only $USDu is fully minted by the protocol itself, not by external users. It is minted directly against its own protocol-held positions in verified, credit-rated, yield-bearing lending collateral.

• No user-minted liabilities Users cannot mint $USDu or take leveraged positions that could force bad debt onto the system.

• Collateral is not tradable The vault tokens used as collateral to mint $USDu cannot be traded or dumped onto the market. They remain locked within the protocol.

• No floating yield obligations There is no risk of over-promised yield causing a liquidity mismatch. Yield is simply what the lending markets pay, distributed via $sUSDu.

• A-rated credit structure Because $USDu is minted only against its own locked lending positions and is 100% overcollateralized, the probability of default is extremely low. This structure earns $USDu an A-Rating in credit risk scoring frameworks.

In other words: There is no mechanism that could cause $USDu to become undercollateralized, no way to "run the bank," and no liquidity mismatch that could trigger a depeg.