What is USDS?
USDS is the first stablecoin that is 100% backed by cryptocurrency and derivatives. We create a delta-neutral position in the backend
It is an interest-bearing ERC-20 token and is pegged to the value of USD.
Anyone can issue or redeem USDS with BTC.
How is the USDS pegged to the value of USD?
By shorting an equivalent amount of BTC that is in custody, we are able to create a synthetic USD position.
For more information on how we create a synthetic USD position, please refer to the following page. (We do not use BitMEX.)
How do we pay interest to USDS holders?
The futures basis is the source of the interest. Users of USDS will receive the interest that is generated from the futures basis.
For more information regarding futures basis please refer to the following site.
What is the current interest rate?
Interest rate is currently 5.00% APY but may change in the future based on the futures basis.
What currency is the interest paid in?
Interest is paid in USDS.
Does the interest compound?
Yes, your USDS balance will compound by the interest rate every day at 00:55 UTC.
How frequent is the interest rate payments?
Interest payments are made every day at 00:55 UTC.
Your USDS balance will increase automatically by the amount of interest.
Interest payments are made onchain directly to your wallet.
When does conversion between BTC and USDS happen?
We convert BTC into USDS and vice versa once per day at 00:10 UTC. The exchange rate between BTC and USDS is determined at the time the user makes the conversion request.
Is the USDS backed 100%?
Yes. Users can verify that it is 100% backed by bitcoin by checking our dashboard. (Dashboard is currently under development.)
Users will always be able to redeem their USDS for BTC.
Do you lend the bitcoin that is in custody?
No, we do not lend out bitcoin. Our bitcoin is stored at ftx and bybit in cold storage.
Can you issue USDS with fiat?
No, we do not touch fiat. You can issue USDS with BTC.
What rate do you use when you convert between USDS and BTC?
We use the FTX BTC/USD index rate.
To find out more about how the index is calculated, please refer to the following page.
What happens to the redeemed USDS?
USDS that has been redeemed will be burned and will not circulate.
How long does it take to process withdrawals?
We process withdrawals as quickly as possible. Most withdrawals are processed within a few hours. Larger withdrawals may taker longer and take up to a few hours to a few days.
How long does it take to reflect deposits?
BTC: 3 confirmations
ETH, USDS, USDT, USDC: 15 confirmations
What are the fees?
USDS Issue fee: 0.10% of issue amount. (The fees are included in the conversion rate.)
USDS Redeem fee: 0.20% of redeem amount. (The fees are included in the conversion rate.)
Withdrawal fee: 0.0002BTC for BTC, 10 USDS for USDS.
Deposit fee: Free
Is there any counterparty risk?
Yes, if FTX or bybit loses access to its funds, we may lose the bitcoin and will not be able to redeem our users at par.