The underlying assets are completely supported by short-term U.S. debt tokens, and the "value attribution" algorithm ColorTrace is used to achieve community-driven growth. What variables will the full-chain stablecoin USDV bring to the industry?
Written by: Karen, Foresight News
How to introduce high-liquidity, low-risk short-term U.S. debt onto the chain is not only a typical case of RWA, but also a value depression being explored in the stablecoin field.
Tether's third-quarter report showed that it invested up to $72.6 billion in U.S. debt, accounting for more than 84% of its total reserves. In comparison, this proportion was less than 3% in 2021. This shift in strategy reflects the increasing tendency of stablecoins to strengthen their backing with real assets, thereby enhancing stability, liquidity, and resilience. The newly launched full-chain stablecoin USDV completely sets the underlying assets as short-term U.S. debt tokens to maintain the liquidity and stability of the stablecoin ecosystem.
What is USDV?
USDV was launched by the Verified USD Foundation, a non-profit organization dedicated to developing the stablecoin ecosystem. It is a stablecoin whose price is pegged to the U.S. dollar at 1:1, and the underlying assets behind it are fully supported by the short-term U.S. debt token STBT.
STBT was issued by Matrixdock, the RWA brand of Matrixport Group, in February this year based on the ERC-1400 standard. It is fully supported by U.S. debt maturing within 6 months and is designed to provide qualified investors with risk-free U.S. Treasury bond yields on the chain. Chance. 1 STBT is equivalent to 1 USD of underlying net asset value (NAV), and interest is distributed through the balance of rebase holders on a daily basis. As of the time of writing, the supply of STBT has reached more than 110 million pieces, and its demand is obvious.
USDV adopts the ERC-20 standard. The underlying assets can not only be verified on the chain, but also have real-time minting and redemption channels to ensure 100% collateral support and key stability and transparency.
In addition, USDV is integrated with LayerZero's full-chain fungible token (OFT) standard and is a truly native full-chain stablecoin. USDV also uses the value attribution algorithm "ColorTrace" invented by LayerZero to share the interest incentives generated by reserve assets with contributors who promote the development of its stable currency in a fair and transparent manner, thereby driving its stable currency system to form a healthy virtuous cycle effect.
That is to say, from a user's perspective, since USDV reserves are relatively stable real-world assets, they can trade or hold USDV at a value of 1 US dollar at any time, use USDV as collateral or provide liquidity, and even be used for Pay.
How does USDV work?
There are three main roles in the USDV system: Verified Minter (community contributor), USDV operator, and liquidity provider. Among them, the value attribution algorithm "ColorTrace" plays an important role, which is also USDV's built-in fair and transparent incentive mechanism. Key drivers.
The operation mode of USDV can help us understand the principle of ColorTrace algorithm. First, influential ecological organizations can apply to become Verified Minter through KYC. After passing KYC, they can become Verified Minter of USDV, and then can use STBT as collateral in the Vault contract to mint USDV. The Vault contract is also used to maintain the 1:1 peg between STBT and USDV.
When Verified Minter mints USDV, it will be assigned a unique color and colored, as well as unlock the functionality of USDV transfers, redemptions, and reward claims.
Liquidity providers bring stability and enable USDV to be distributed on demand. Then, Builder, DEX, lending protocols, liquidity protocols, wallets, and pledge protocols on any chain can integrate USDV. All colors of USDV are fully interchangeable. As more and more users use USDV, Verified Minter's rewards will be maximized.
The above coloring is to visually mark the ecological partners who mint them, so as to provide fair and transparent incentives to ecological partners based on the USDV circulation with corresponding color markings.
What are the features and innovations of USDV?
ColorTrace mechanism: drives fair and transparent incentives and builds a "self-growing" ecosystem
The biggest innovation of USDV is the above-mentioned value attribution algorithm ColorTrace, which enables USDV ecological partners to obtain corresponding incentives fairly.
Therefore, USDV ecological partners are motivated to create more attractive applications and formulate more incentives to attract users to increase the liquidity of USDV in the ecosystem, ultimately forming a positive positive feedback loop effect.
In other words, the ColorTrace mechanism can drive the establishment of a USDV "self-growth" ecosystem, providing unlimited power for the prosperity and sustainable development of the ecosystem.
Implemented layer by layer to ensure stability, security and transparency
USDV also regards stability and security as a top priority. Not only has the underlying assets of the stablecoin been set to the highly liquid, low-risk short-term U.S. debt token STBT, but it has also adopted the USDV open source smart contract through Paladin, OtterSec and Zellic. io’s third-party audit.
In addition, thanks to the daily reserve certificate of the initial reserve asset STBT, real-time monitoring on the chain, and the finality of ColorTrace operations, the security and transparency of USDV are ensured.
In order to limit USDV from being affected by technical issues with the underlying asset in extreme cases, a rate limiter is installed during the minting and redemption process of the asset, that is, the number of minting and redemptions per second is limited on a certain basis, thereby maximizing Reduce the impact to a certain extent.
Full chain support, seamless use
In addition, USDV natively integrates LayerZero's full-chain fungible token (OFT) standard. Users can seamlessly and seamlessly use any color-marked USDV in multiple networks, fundamentally avoiding the problem of cross-chain fragmentation.
Upon initial release, USDV supports Ethereum, BNB Chain, Avalanche, Arbitrum and Optimism mainstream networks, and will later have the opportunity to expand to more than 40 networks supported by LayerZero.
What is the future of USDV?
At launch, USDV is supported by 23 industry-leading CeFi, DeFi and GameFi contributors, including Animoca Brands, Bitget Exchange, Curve Finance, Beam by Eco, Frax Finance, LayerZero, Matrixport, Maverick Protocol, Stargate Finance , SushiSwap, Trader Joe’s, Wintermute, Wombat Exchange, WOO Network, zk.Link, etc.
It can be found that USDV supporters and adoption are spread across various fields such as CEX, asset management, custody, DEX, LP, AMM, DeFi protocol, OTC, infrastructure, wallets, payments, etc. With the further adoption of USDV, it is expected to unlock a wider range of
Deeper application scenarios and further enhance market acceptance.
In addition, USDV will transcend the scope of traditional stablecoins and drive the paradigm shift of stablecoins from a centralized model to community-driven growth. The goal of the Verified USD Foundation is to foster a collaborative ecosystem that fairly distributes value among its contributors. This incentive mechanism of USDV will promote contributors and the platform to jointly achieve the sustainable development of USDV.
The introduction of the USDV stablecoin provides more options for market participants, enhances the resilience of the DeFi and stablecoin ecosystem and promotes capital flows. USDV will also become a key breakthrough point to break down the barriers and build communication bridges between DeFi and TradFi, bringing broader development space to traditional finance and DeFi.
To sum up, USDV, whose underlying assets are supported by short-term U.S. debt tokens, may push the entire stablecoin industry towards a stable currency through the layer-by-layer transmission and interlocking operation mechanism, coupled with full-chain support, as well as the fair incentive mechanism through the ColorTrace algorithm. Move in a more open and innovative direction.
