How USD.AI works

Decentralized Stargate: A yield-bearing synthetic dollar backed by treasuries, AI infrastructure & DePIN network assets

USD.AI allows users to deposit stablecoins in order to mint both yield bearing and non yield bearing tokens, depending on a user's preference. USDai, a non-yield bearing synthetic dollar, is backed by tokenized treasuries (through M^0's "M" token) and always instantly redeemable. sUSDai, a yield token, earns the treasury yield from the treasuries backing USDai, as well as yield from physical infrastructure assets (through MetaStreet's "LCT" tokens). sUSDai is subject to a 30 day redemption window, where users can bid to redeem from cash available in that 30 day period. While sUSDai supports only intentionally conservative credit profiles, it can lose value if underlying infrastructure loans default or are otherwise impaired.

Initial iteration of USDai (Stage 2)

USDai & M^0 (M)

USDai is backed solely by tokenized treasuries through digital dollar protocol M^0. M^0 creates a programmable, credibly neutral, overcollateralized stablecoin, "M". By leveraging M as the base unit for USDai, full collateralization with instant redeemability is enabled for USDai holders at all times. USDai carries no exposure to the higher risk, higher return infrastructure credit LCTs backing sUSDai - only the 0-90 day TBills backing M.

Refer to M^0 docs page for more details on the underlying mechanisms enabling M.

sUSDai & MetaStreet (LCTs)

sUSDai earns all of the yield generated from the T Bills underlying USDai holdings, in addition to all of the yield generated from MetaStreet "Liquid Credit Tokens" (LCTs).

MetaStreet, a permissionless structured credit protocol, facilitates loans against tokenized physical infrastructure (DePIN) assets, such as GPUs, solar panels, and PPAs. These loans are represented onchain with MetaStreet's LCTs, which enable a share-based accounting system to accrue yield from infrastructure loans over time. These LCTs can fluctate in price, as loans amortize and interest is paid (increasing value) or if loans default and collateral is sold for a loss (decreasing value). The MetaStreet protocol encourages loan repayment with overcollateralized day 1 loan originations and loan amortization schedules further derisking the lender position every 30 days. Should a borrower default on their loan, the infrastructure asset securing the loan is sold via english auction, with the proceeds from the sale returned to the backing of sUSDai.

USDai is a synthetic dollar product similar to Ethena's USDe, not a traditional stablecoin like USDC or USDT. sUSDai presents users with access to yields from debt backed by infrastructure assets (InfraFi), like energy or compute.

While the design aims to minimize risk associated with these instruments, make sure to fully review all risks and mitigants associated with the offering.

Refer to MetaStreet's docs page for more details on the underlying mechanisms enabling LCTs.