Structured Finance for Limited Liquidity

Given the nature of capital market assets (low mark-to-market), USD.AI rebuilds the entire DeFi stack to be oracleless & made for capital assets rather than just money assets (spot market & oracle-based). “Structured finance” is the process of abstraction: utilizing layers of liquidity mechanisms to achieve full risk transfer, like thermal dynamics but for finance. USD.AI rebuilds and layers oracleless lending, yield-bearing positions/tokens, risk underwriting (vaults), yield splitting, and finally a synthetic dollar, without the need of an oracle. USD.AI and the corresponding token representations (USDai and sUSDai) represent the latest progression of the MetaStreet protocol & ecosystem around onchain structured credit products.

Lending without price oracles (2023)

• Launch: Automatic Tranche Maker (ATM) (like Uniswap V3 for oracleless lending)

• Enables oracleless lending for low-liquidity assets (NFTs, RWAs, etc)

• $3M TVL

Long-dated, yield-bearing loans (2024)

• Launch: Liquid Credit Token (LCT) (similar to Lido)

• Enables trading of yield-bearing tranche positions, “rebases” upon successful repayment of loans

• $60M TVL

Modular underwriting (RWA Asset Origination) (2024)

• Launch: ObjectSDK (comparable to Morpho Blue for DePIN/RWAs)

• Modular underwriting system for low latency appraisals & amortization schedules.

• 20 new assets enabled

Yield splitting without spot LP (2024)

• Launch: Yield Pass (similar to Pendle but for NFTs)

• Strips & isolates yields but for productive illiquid assets, such as Node Licenses

• $202M TVL (current)

USD.AI synthetic dollar for unified liquidity layer (2025)

• Launch: USD.AI (like “GLP/HLP” - a single token for multiple collateral types)

• Yield-bearing synthetic dollar backed by loans against DePIN/AI hardware (InfraFi), targeting 20-25% APR

• Initially starting as a T-Bill yield-bearing product with plans to progressively diversify collateral base to InfraFi assets

• Target: >20% penetration of all DePIN hardware, already $237m of borrower demand demonstrated

Queue Extractable Value (QEV) to optimize redemption liquidity (2025)

• Launch: QEV-Boost – a liquidity incentive system based on epoch timing (similar to Flashbots)

• Improves USD.AI liquidity allocation through market-driven queue ordering

  • Structured redemption queue based on payment schedules

  • Stakers can bid in QEV auctions for priority access to liquidity

  • Fair distribution through proportional queue advancement

  • Passive stakers earn rewards from smoothed yields and auction fees

• Target: Enhance redemption efficiency to earn up to 3% of protocol yield via QEV prioritization

• See expanded details here.