DefiDollar (DUSD) — an attempt to become a stablecoin index that Defi uses, with a value close to the underlying asset (dollar) and the best collateral ratio.
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Description of DefiDollar (DUSD)
DefiDollar (DUSD) is supported by existing stablecoins. For example, users start by choosing two stablecoins, Dai and sUSD, as their underlying assets in equal proportions. If a user wants to issue 200 DUSD, he deposits 100 coins.
The interest income from Aave coins goes to the income pool. The coins in the pool can be traded, using the exchange mechanism. This opens up the possibility of arbitrage, since the number of coins in the pool is still in a 1:1 ratio. Consequently, the affiliates will trade A for B from the pool, which will bring the values of both pools closer to $ 100 each, and DefiDollar will be balanced again. A small commission from these trades will also go to the profit fund. Key benefits of DefiDollar:
| Coin | More stable stablecoin and hedging. |
| Efficiency | A platform for efficient exchange of stablecoins through AMM. |
| Control | Minimizes the need for management. |
| Income | Allows you to “catch” periodic and short-term growth in profitability on the underlying stablecoin basket. |
If DUSD is trading above $ 1, instant profits can be made as the protocol allows DUSD to be generated by blocking other stablecoins at $ 1. Affiliates will release more DefiDollars and sell them in the marketplace, causing the price to drop and flatten out in the $ 1 region. If DUSD is trading below $ 1, you can also make a profit, as the protocol allows one DUSD to be exchanged for other stablecoins in the amount of $ 1. The arbitrageurs will buy coins and redeem them from the protocol, which will lead to an increase in the price and equalization to the $ 1 region.
Additional information
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