Meet Alice. She has 1 ETH worth $4,000, but she's tired of the constant price volatility. She wants stable purchasing power without giving up the benefits of DeFi.
Alice's options are limited: centralized stablecoins require trust in banks, while other decentralized options either don't generate yield or require complex position management. She needs something better.
USPD offers what Alice needs: a permissionless, yield-bearing stablecoin. She can mint USPD with her ETH and let the system handle everything else. No position management required.
What makes this possible? Stabilizers - sophisticated actors who have already deposited ETH into the system and set their desired collateralization ratios. They provide the overcollateral that backs USPD.
The system automatically matches Alice's 1 ETH with 0.5 ETH from the stabilizer's pool, creating 150% overcollateralization. This happens instantly and automatically.
With 1.5 ETH now securing the position (worth $6,000), Alice receives 4,000 USPD in her wallet. She now has stable purchasing power that generates yield automatically.
Alice is done! She has 4,000 USPD that maintains its $1 peg and generates yield automatically. The stabilizers handle all the complex position management behind the scenes.
The price of ETH increases to $4,800. The system remains healthy and is even more overcollateralized. Alice's USPD is safe and stays pegged to the USD. She receives rebasing rewards through stETH.
As the underlying stETH collateral earns staking rewards and ETH appreciates, Alice's USPD automatically grows in value. She doesn't need to manage anything - the yield is built into her stablecoin balance.
When ETH drops to $3,200, some stabilizer positions become undercollateralized. But Alice's USPD remains safe - it's backed by the entire pool of stabilizers, not just one position. The system automatically rebalances.
When stabilizer positions become undercollateralized, liquidators step in. They buy USPD (often at a discount) and use it to close bad positions, earning a profit while removing unhealthy collateral from the system.
Through liquidations, the system automatically removes undercollateralized positions and reduces USPD supply. This brings the system back to health. New stabilizers can step in to provide fresh collateral.
Throughout all the market volatility and system rebalancing, Alice's 4,000 USPD remained stable and redeemable. She never had to monitor positions or manage collateral - the system handled everything.
To remain market-neutral against their long ETH exposure, Stabilizers open a short position on a perpetual futures exchange. This hedges against ETH price volatility.
In most market conditions, traders who are short ETH are paid funding fees by those who are long. This provides a consistent yield, averaging around 11% annually.
This strategy is highly capital-efficient. Stabilizers only need to provide a fraction of the capital for the short position they open, effectively leveraging their capital.
Stabilizers can choose their level of risk. A conservative 2x leveraged short can yield ~22% APY, while a more aggressive 3x leverage can yield ~33% APY.
Meet Alice. She has 1 ETH worth $4,000, but she's tired of the constant price volatility. She wants stable purchasing power without giving up the benefits of DeFi.
Alice's options are limited: centralized stablecoins require trust in banks, while other decentralized options either don't generate yield or require complex position management. She needs something better.
USPD offers what Alice needs: a permissionless, yield-bearing stablecoin. She can mint USPD with her ETH and let the system handle everything else. No position management required.
What makes this possible? Stabilizers - sophisticated actors who have already deposited ETH into the system and set their desired collateralization ratios. They provide the overcollateral that backs USPD.
Alice simply deposits her 1 ETH (worth $4,000) to mint 4,000 USPD. The system automatically matches her with available stabilizer collateral. It's that simple - no complex setup required.
The system automatically matches Alice's 1 ETH with 0.5 ETH from the stabilizer's pool, creating 150% overcollateralization. This happens instantly and automatically.
With 1.5 ETH now securing the position (worth $6,000), Alice receives 4,000 USPD in her wallet. She now has stable purchasing power that generates yield automatically.
Alice is done! She has 4,000 USPD that maintains its $1 peg and generates yield automatically. The stabilizers handle all the complex position management behind the scenes.
The price of ETH increases to $4,800. The system remains healthy and is even more overcollateralized. Alice's USPD is safe and stays pegged to the USD. She receives rebasing rewards through stETH.
As the underlying stETH collateral earns staking rewards and ETH appreciates, Alice's USPD automatically grows in value. She doesn't need to manage anything - the yield is built into her stablecoin balance.
When ETH drops to $3,200, some stabilizer positions become undercollateralized. But Alice's USPD remains safe - it's backed by the entire pool of stabilizers, not just one position. The system automatically rebalances.
When stabilizer positions become undercollateralized, liquidators step in. They buy USPD (often at a discount) and use it to close bad positions, earning a profit while removing unhealthy collateral from the system.
Through liquidations, the system automatically removes undercollateralized positions and reduces USPD supply. This brings the system back to health. New stabilizers can step in to provide fresh collateral.
Throughout all the market volatility and system rebalancing, Alice's 4,000 USPD remained stable and redeemable. She never had to monitor positions or manage collateral - the system handled everything.
Alice can redeem her USPD for ETH at any time when the system is healthy. The pooled collateral model ensures there's always sufficient backing, even if individual stabilizer positions come and go.
To remain market-neutral against their long ETH exposure, Stabilizers open a short position on a perpetual futures exchange. This hedges against ETH price volatility.
In most market conditions, traders who are short ETH are paid funding fees by those who are long. This provides a consistent yield, averaging around 11% annually.
This strategy is highly capital-efficient. Stabilizers only need to provide a fraction of the capital for the short position they open, effectively leveraging their capital.
Stabilizers can choose their level of risk. A conservative 2x leveraged short can yield ~22% APY, while a more aggressive 3x leverage can yield ~33% APY.
Become a Stabilizer today to start earning a competitive, delta-neutral yield while helping to secure the USPD ecosystem.