How is USD+ created?

USD+ is a yield-generating stablecoin created by Overnight. It is fully backed by yield-generating assets and pegged 1:1 to USDC. Users can mint USD+ from the official Overnight front-end app by converting USDC. Once minted, the USD+ begins to immediately accrue compounded yield. Overnight uses a liquidity index reflecting the current ratio of the number of issued USD+ tokens to the volume of assets on strategies, expressed in USDC. USD+ is able to generate yield as the protocol deploys the underlying stablecoins to third-party DeFi platforms. The yield generated from interest, trading fees, and protocol rewards is pooled and converted to stablecoins to produce USD+-denominated yield. This yield is passed on to USD+ holders through a constant rebasing of the token supply. This allows the USD+ price to stay pegged at 1 USD while the user's token balance adjusts in real-time to reflect the accrued yield.

What is USD+ used for?

USD+ is a price-stable asset that is mostly used as a hedge against volatility as it maintains a stable value of around 1 USD. Users need an alternative store of value and medium of exchange to navigate the highly volatile crypto markets. USD+ addresses this problem for crypto native users, as well as allows users to passively earn yield while held directly in their wallets.

How is the price of USD+ kept stable?

USD+ is an asset-backed currency that maintains a free-floating peg to the USD. This means that its value may differ from exactly 1 USD from time to time given current market conditions. The protocol's rebasing function treats 1 stablecoin as 1 USD+ to protect user balances from being impacted by the daily fluctuations in the prices of the underlying stablecoins. Since the rebase function only counts the number of tokens, the user's USD+ balance should only increase over time. This is paid out by Overnight as a daily profit.