1:1 Pegged to USD
Last updated
Last updated
USDi maintains a 1:1 peg to USD to ensure stable value. This is achieved by keeping the total asset value consistently above the total USDi in circulation. All underlying assets are fully liquid and completely hedged with derivative positions. This hedging strategy ensures the overall portfolio is resistant to market price movements and can be converted to USD instantly.
Yield generated from the portfolio steadily increases the total asset value. Once it surpasses a certain threshold and the total asset value significantly exceeds USDi in circulation, new USDi is minted and distributed to all USDi holders as profit gains. If the USDi in circulation ever exceeds the total asset value, the difference will be covered by burning USDi from the 0max1 reserve pool by sending it to the locked account, thereby reducing circulation.
During USDi gains distribution, a certain percentage of USDi is allocated from overall available profits to a treasury wallet. The purpose of this treasury wallet is to cover any related expenses for the 0max1 protocol and, more importantly, to establish a stabilization fund.
If there is ever an event where the amount of USDi in circulation is greater than the overall assets, USDi from this treasury account will be burned and sent back to the locked address account. In this way, the USDi in circulation will be reduced to ensure the underlying assets backing each USDi always maintain a value above $1.
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