High Yield USD
hyUSD is a decentralized stablecoin that provides convenient access to DeFi yields, enabling holders to earn passive income on their dollars. Governance aims to take low to moderate risk to return high DeFi yields in order to mitigate against inflation.
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- Asset Type: ERC-20
- Market Cap: $5.5M
- Fully Diluted Valluation: $5.6M
- FDV / MC: 1
- Ranking inside Exponential (among stables): #41
- Circulating Supply: 5,201,445
- Total Supply: 5,288,869
- Volume (24H): $27.3K
- ATH: $1.18 (08/16/2024)
- ATL: $0.98 (05/23/2024)
hyUSD is a low-cap, fully collateralized asset. This asset depends on two centralized entities for custody services. This asset is exposed to the underlying risks of Reserve, Convex, Curve, Maker and Flux, which are protocols rated as Good, Good, Best, Best and Average, respectively.
hyUSD is a stablecoin that often trades more than 100bps off its peg to USD, making it a highly volatile store of value.
hyUSD has an uncapped supply but has inflation control or burn mechanisms in place.
How is hyUSD created?
hUSD is a fully-backed, yield-generating stablecoin that is minted through the Reserve protocol. Reserve is a platform that enables anyone to create and use assets (RTokens) that are backed by a community-defined basket of crypto assets. hyUSD can be permissionlessly minted and redeemed for its underlying basket of assets. RSR stakers provide further overcollateralization protection for hyUSD holders in case of defaults in exchange for a cut of the yield earned. Governance is conducted on-chain and managed by RSR stakers, which aligns incentives with eUSD holders.
What is hyUSD used for?
hyUSD provides users with an alternative fiat currency that is pegged to 1 USD. Reserve has purchased a substantial amount of CRV tokens to incentivize liquidity for its rTokens. hyUSD can be held as a treasury asset for a DAO or company seeking to diversify its crypto holdings. Users can simply earn yield on their hyUSD by holding it in their wallets.
How is the price of hyUSD kept stable?
hyUSD is designed to trade at 1 USD as it is fully collateralized by its basket of collateral assets. A portion of yield earned by the underlying collateral is directed towards RSR stakers for providing overcollateralization protection. hyUSD maintains its peg through the issuance and redemption mechanisms that are used by arbitragers. For example, when hyUSD is trading below $1, an arbitrager will buy hyUSD at the discounted price and redeem it for the basket of collateral assets, thereby reducing the supply of hyUSD in circulation. When hyUSD is trading above $1, arbitragers would take advantage by minting hyUSD with the underlying collateral and selling on the open market until the peg has been restored to 1 USD.