The motivation to develop a stablecoin like USDAO is to build an enterprise-friendly, easily integrable and interoperable stablecoin that should not only be reliable as fiat currencies but also open new doors of possibilities for businesses using blockchain technology. There is no stablecoin protocol that have addressed the above-mentioned problems despite the market being flooded with hundreds of stablecoin projects. We intend to provide a solution to this issue. We, at RUIT Foundation, have built The USDAO Stablecoin that would simplify transactions in business processes and extend limits for cross-border global transactions by offering faster and safer transactions, high liquidity, decentralized governance, multi blockchain compatibility and many more advantages than our centralized and decentralized competitors. We promise to deliver simpler implementation and easy integration of our technology into your existing business. USDAO stablecoin is powered by multiple blockchains including Ethereum which itself is a reputed and established market leader in decentralized application’s technology.

The RUIT foundation is a not-for-profit corporation charged with the responsibility primarily to focus on maintaining the USDAO ecosystem and nurturing the community. However, if a situation occurs that requires immediate action to prevent any catastrophic event the foundation holds the right to step in and take the right action. It is important to clarify, that the foundation would never participate or promote any action that could cause an individual or a party including the RUIT foundation itself any monetary benefit. Having said that, these are few situations were the RUIT foundation holds the right to take actions upon the following:

1. Upgrading or launching a new or improved version of USDAO
2. Adding new oracles or removing obsolete oracles
3. To ensure the safety of the pool and safeguard the interests of the users during an unknown event
4. Raise funding by minting new ASSET tokens through governance at a chosen market price.
5. Taking proactive measures required to safeguard and promote USDAO ecosystem.

“We believe in the principle of deploy and forget and we wish a situation mentioned above will never occur where we would need to step in to safeguard our system. In the majority of the scenarios, the community shall govern the USDAO Ecosystem through the governance protocol.”

- USDAO Team

In recent years cryptocurrencies have unlocked new horizons of digital transformations that once seemed like an alien technology and mostly beyond comprehension. In the past decade, we have seen Bitcoin, a true peer-to-peer decentralized digital asset that runs without any government or central institution. Then came Ethereum that offered the concept of smart contracts and opened the gates to limitless technological possibilities by offering a turing complete system not just to transfer digital assets but beyond.

However, with a history of unstable and high volatility in prices of these cryptocurrencies the dream of running a sustainable enterprise using cryptocurrencies is still a far cry. And thus, stablecoins were invented to solve the above problem. As of writing this paper there exist over 200 stablecoin projects both in the active and under-development phases. Yet most of them are not truely enterprise-friendly and reliable stablecoin that can replace fiat currencies in digital transactions.

For Example: One of the biggest stablecoin failure is of UST stablecoin of Terra Luna which lost 99.99% of its ecosystem valuation (more than $40 billion in three days) after the UST stable coin depegged. Even after knowing the problem beforehand Terra Luna ecosystem was not decentralized enough to make amendments on these changes which were given by their community.

Private issuers of stablecoin like USDT and USDC does not publish a complete transparent audit report on their asset holdings which backs their claim that they have, with respective to, 1 US Dollar to 1 USDT and 1 USDC, out of which USDT has only 5.81% of their treasury in cash and bank deposits as per their March 2022 report, where USDC does not have any transparency on their treasury holding report. This is a major issue as the decentralized ecosystem should not use centralized stablecoin by private issuers which deceives the purpose of true decentralization as they can control and manipulate the supply of their stablecoin without consulting with the user community or through community governance.

To create a stablecoin that meets the requirements of businesses and enterprises, it is important that not only is it competent enough against traditional solutions but also presents significant improvements over them. We offer USDAO stablecoin as a solution to the above problem statement. USDAO stablecoin has been designed to keep simplicity, interoperability, and business compatibility at its core.

Integrating USDAO as a payment channel into your existing business or enterprise use case is simpler than the leading payment solutions available today. All you need is a blockchain wallet with an account to send and receive payments in USDAO to get started. The process is simpler compared to traditional solutions which include registrations, KYC (Know Your Customer), complex integrations, and high transaction fees.

Unlike many other existing stablecoins like USDT and USDC (USD Coin), we offer 100% transparency in accountings and a robust governance mechanism that shall be fully decentralized and run by an open community. We have also removed the unfair and unnecessary burden of overcollateralization mechanism of assets for minting tokens as DAI does. Instead, we bring a fairer and robust protocol to maintain pool stability. The USDAO pool mechanism assures that the pool never gets undercollateralized and users are never threatened with forced liquidation.

Above all, unlike its competitors, USDAO comes up with an ecosystem of in-house native use cases. The USDAO stablecoin is one crucial element to the financial architecture we are building. The details of such use cases are mentioned in the respective sections below. With the presence of USDAO on multiple blockchains and combining its interoperability and compatibility, it becomes a one-stop destination for truly decentralized robust, safe, and secure financial solutions that is industry ready.

Before moving onto USDAO workflow let’s dive into some of its crucial components and terminologies. The project is inspired from the USM project. However, we’ve made significant changes and added multiple components to meet our requirements.

All prices are denominated in ethereum. These prices are computed by consulting ETH/USD price oracles, except when otherwise stated. Since the stablecoin is deployed on multiple blockchains the keyword ERC20 is used in a general form. Every such statement is true for all the other protocols like BEP20 for Binance Smart Chain and other chains respectively.

The contracts are designed in a way to reward minting while discouraging burning. The output can however still affect, depending upon how much “change” minting or burning of USDAO is bringing on the collateral reserve. So, in the case of USDAO minting, the tokens minted within the 5% range of “change in total collateral” results to 1:1 output. Whereas burning USDAO can cause slippage depending upon the number of tokens being burnt.

For detailed technical analysis please checkout https://docs.usdao.io/usdao-v2/.

This is the actual stablecoin whose price is pegged relatively to 1 US dollar. It can be minted using Ether. The amount of tokens minted depends upon the median ETH/USD price returned by the oracles which is used by the system at the time of the transaction.

ASSET Token is the governance token of the protocol aimed to distribute governance rights/voting rights for the USDAO Ecosystem. ASSET can be acquired by participating in the sale of tokens through a USDAO community campaign/Launchpads or by earning the reward for staking the USDAO stablecoin in OnVault feature of USDAO ecosystem.

97% of the funds raised by the ASSET governance token sale would be deposited into the USDAO Pool to further stabilize USDAO Pool and the remaining 2% for the liquidity pool pair creation and 1% towards Community Marketing.

The Ether that is deposited during the minting operation of USDAO stablecoin and the ETH deposited for borrowing of USDAO stablecoin from OnVault feature in USDAO Ecosystem is deposited into the USDAO smart contract, also known as the USDAO Pool. The USDAO Pool is the backbone of the entire system as it determines the financial health of the system. It helps determine the debt ratio.

The funds raised from the ASSET Token sale will be locked in the USDAO pool to create deep liquidity which will stabilize USDAO stablecoin at 1 US dollar.

Buffer is the Ether value in USD calculated using oracle price which is left after subtracting USDAO total supply in the ecosystem. For more understanding: review our docs

Mint price is the price at which USDAO stablecoin is minted against Ether. It is relatively pegged to 1 US dollar worth of Ether. The price of $1 worth of ETH at the time of minting is determined by the median of ETH/USD price returned by the oracles being used.

The mint price is not subjected to fluctuation from its base price of $1. This is intentional and is important to discourage any arbitrage opportunities.

Burn price is the price at which the user withdraws back his Ether against the deposited stablecoins. Equivalent to the minting price, the burn price is decided by the current ETH/USD prices returned by the oracles in the USDAO Ecosystem.

In its simplest mathematical representation, the debt ratio can be defined as the ratio of the total number of stablecoins out in the market to the US dollar value of the USDAO pool i.e.

𝐷𝑒𝑏𝑡 𝑟𝑎𝑡𝑖𝑜 = 𝑡𝑜𝑡𝑎𝑙 𝑈𝑆𝐷𝐴𝑂 𝑠𝑡𝑎𝑏𝑙𝑒𝑐𝑜𝑖𝑛𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑚𝑎𝑟𝑘𝑒𝑡 / 𝑈𝑆𝐷 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑡ℎ𝑒 USDAO P𝑜𝑜𝑙

The debt ratio signifies the ratio of the amount of buy and sell activities of USDAO stablecoin in the market. In other words, if the debt ratio is, let’s say, 50% that is equivalent for every 100 USD worth of Ether present in the system there are 50 stablecoins (worth 50 USD) out in the market. This also means that each token if burnt right now for Ether the system has sufficient collateral in the pool to pay every USDAO user back.

The debt ratio of 100% or above is an alarming situation for the system because it means the system does not have enough Ether to return to users in case of 100% USDAO token withdrawal. Hence at this stage, the users receive Ether which is in proportion to the number of tokens they are withdrawing and the amount of Ether available in the pool.

As an example, let’s consider a situation where 1 Ether is 1 USD. Let’s suppose there are a total of 100 USDAO tokens in the market. Now let’s assume a person owns 50 of them and he wants to burn 50 USDAO tokens. If the debt ratio is below 100%, he shall receive Ethers worth 50 USD. But if the debt ratio is above 100% and only 80 USD worth of Ether is present in the pool then the price of each USDAO reduces to 80 USD/100 USDAO i.e., 0.8 USD per USDAO. So, the user shall get about 40 USD worth of Ether after the burn.

In such situations, the debt ratio then must be brought down below by funding the USDAO Pool by minting ASSET tokens through USDAO Ecosystem collected revenue through community governance or by investors. The community must be proactive to ensure required steps must be taken to keep the debt ratio below 80%.

When the debt ratio goes above 80% the revenue collected in USDAO Ecosystem would be used to collateralise the pool through governance by the foundation proposal.

An oracle is a reliable source of ETH/USD price. Our system currently calculates the median ETH/USD price from following oracles

• Chainlink ETH/USD.
• Uniswap v3 ETH/USDC TWAP.
• Uniswap v3 ETH/USDT TWAP.

These oracles are an indispensable part of the whole ecosystem as it determines the mint and burn prices. The debt ratio is also determined by the prices returned by the oracles.

The reason to use three oracles is to protect the system against any malfunction or inaccuracy in any individual oracle. The system calculates the median price returned by these three oracles, which is further used in operations like mint, burn, etc.

PCAP Represent an predictive price of Asset token from the USDAO pool in terms of Collateral allocated in USDAO pool’s Buffer

PCAP = Buffer/Total Circulating supply of ASSET Token

This predictive price is implemented because the funds raised from the asset token sale will be locked in the USDAO pool forever and the collateral locked will be in ETH creating a minimum ASSET price discovery in accordance with the USDAO pool (In theory).

While Minting and Burning, a marginal charges are collected by the ecosystem through smart contracts. There are no charges on Transfer of USDAO between accounts. These are the following charges that the system generates:

USDAO Mint: 0.0% of the transaction total deducted when exchanging ETH for USDAO.

USDAO Burn: 0.3% of the transaction total will be deducted when exchanging USDAO for ETH.

USDAO Transfer: 0.0% charges on the Transaction Fee

OnVault Staking: 0.1% of the claimed ASSET deducted whilst claiming staking rewards.

All the charges collected accumulate in the USDAO Revenue contract which are governed by the ASSET token holder community. The community hence can decide how to utilize the funds generated for the welfare of the ecosystem. The RUIT foundation, however, can also request a marginal share of the fund from the USDAO governance community(ASSET) through proposals to promote economic activities like running hackathons and other activities essential for uplifting the USDAO ecosystem.

The percentage of all the above types of charges is decided by the ASSET governance community through prescribed governance protocol.

The RUIT foundation receives working and operation capital from USDAO ecosystem revenue through community governance, with the purpose being the ongoing operation and maintenance costs required to meet, the costs of the base infrastructure which supports the USDAO protocol.

Only RUIT Foundation holds the key rights to propose the proposal for withdrawing the funds from the USDAO Ecosystem Revenue with the approval of the governance community.

The RUIT Foundation may request additional funds from the USDAO ecosystem to cover additional activities beneficial to the protocol by submitting a budget proposal through the governance proposal system.

Examples of budget proposals could include costs for running hackathons, additional liquidity provision, marketing and so on.

To maintain neutrality and the principles of decentralized governance, the support of ASSET token holders will be required to approve the proposal, meaning that the Foundation always remains accountable to the wider community.

Any funds which would be transferred in the event of an approved proposal would be derived from the USDAO Revenue contract’s collected revenue in the form of either USDAO or ETH.

The USDAO protocol consists of multiple smart contracts. The USDAO stablecoin, is an ERC20 token whose price is pegged to 1 US dollar. The second token, the ASSET token, is also an ERC20 token but its price may fluctuate depending upon the Market volatility in the Exchange price and independent from USDAO pool.

The prime role of the ASSET token is to absorb all the market price volatility of Ether from USDAO and help it maintain its original price which is pegged to 1 US dollar.

The entire system is governed by ASSET token holders. The ASSET token holders, play a key role of USDAO governance in the hands of a decentralized community. The holders of governance tokens can create, vote and delegate proposals forming a DAO (Decentralized Autonomous Organization) for the stablecoin through Snapshot.

This is explained in detail in the governance section in the docs:

Apart from regular mint and burn operations users can also:

1. Stake USDAO stablecoin to get ASSET token as rewards for long-term holders. This is possible through the staking mechanism provided by OnVault staking.
2. Borrow USDAO by providing Ether as the collateral on OnVault App at 0% Free Interest Rate on collateral, Close your Debt any time without incurring any Interest charges.
3. User’s will get ETH* and ASSET token in reward for Staking USDAO in USDAO Vaule.

The USDAO stablecoin is designed to be pegged to 1 US dollar. The two operations, mint and burn, help it maintain its peg. When either of these two activities increases more than the other, the USDAO mint or burn price rises or falls slightly to discourage any more such operations.

However, ideally in stable market conditions, if a user deposits x dollar worth of Ether into the system he shall receive x amount of USDAO stablecoins. Conversely, if a user deposits x amount of stablecoins back into the system he shall receive x US dollar worth of Ether back in his wallet.

The prices for all such operations are determined by the median price of following oracles

- Chainlink ETH/USD, Uniswap v3 ETH/USDC TWAP, Uniswap v3 ETH/USDT TWAP

However, since the price of Ether is constantly volatile it is required to maintain the US dollar value of the USDAO pool always greater than the number of stablecoins out in the market. This is made possible by funding the pool by selling the ASSET Token which is the governance Token of the system through community issuance/Launchpads and raise funds and supply it to the USDAO pool to maintain the stability of the USDAO stablecoin and keep the system always financially healthy.

ASSET token holders act as the governance community for the USDAO ecosystem. ASSET token holders can create and vote on the proposals to make the USDAO protocol always pegged to US dollar.

The exchange rate for the above operation is determined by a set of oracles. One of the biggest hurdles in keeping the trade fair arises through irregular oracle prices. Differences in prices in the USDAO system and the outside world may expose the entire system to unknown opportunities for exploitation and arbitrage. To overcome this issue the protocol utilizes three popular and reliable oracles -

1. Chainlink’s ETH/USD feed, sourcing a bunch of off-chain sources
2. A Uniswap v3 TWAP (time-weighted average price) vs a stablecoin: specifically, ETH/USDC.
3. Uniswap v3 ETH/USDT TWAP

Now even if one of the oracles stopped working or provided the wrong prices the system will continue to work properly. Using the median of the three oracles, protect against malfunction by any single oracle. The median value returned by the oracles is used for all the system's calculations. Through governance, the community can add or delete oracles to make the USDAO ecosystem more robust.

The USDAO protocol also has USDAO Pool contracts that hold the collateral (ETH) and other features like secure transactions, which allows the protocol to prevent fraud from any party with the use of strong cryptographic techniques which makes this protocol more secure and safe for the public blockchain.

USDAO stablecoin can be used for everyday means of exchange, a store of value, market entry, and most commonly to provide a less volatile holding ground for investors and traders during the upswings and crashes of the cryptocurrency market.

• Resourceful documentation, SDKs and tools, to build applications easily and elegantly on top of the USDAO Ecosystem. We are providing rich content for the documentation, libraries, and APIs along with tutorials to the developer community to build applications on top of USDAO. The resources will be compatible with all the major programming languages that are popular in blockchain development. This promises continuous innovation & development of innumerous applications in the future.
• Simplified integration and user-friendly tools. We have emphasized heavily keeping the complexity of the applications away from the user experience. The applications and tools built on USDAO stablecoin are remarkably simple to integrate into any web or mobile application. All our applications are designed to be cross-OS platforms, cross-browser platforms with minimal clicks and dependencies. We are also providing simple documentation, video tutorials, and support to simplify the integration of our USDAO SDK on your platform with minimal technical knowledge.
• Robust architecture and a strong peg to 1 US dollar. The pooling mechanism is designed in such a way to always grow in value without putting any financial pressure on either users or investors. This ensures the stablecoin is always strongly pegged to 1 US dollar by keeping the debt ratio always low. The system is also designed to keep a balance between the number of mints, burns, and discourage too much arbitrage activity committed in a short period. It is designed to keep the collateral position stronger irrespective of a market bullish or bearish run.
• Governed by a 100 percent decentralized community. Any person with ASSET governance tokens has the right to create a proposal, vote, or delegate their votes, that can make crucial changes depending on the future requirement through snapshot.
• Presence in multiple blockchains. USDAO and its applications will be deployed in multiple blockchains including Ethereum and others. As more improved and better blockchain platforms emerge in the future we shall mark our presence there as well.
• Available in multiple pairs and on all major exchanges. USDAO would be available in all the major exchanges of the world including both centralized and decentralized exchanges. It shall also be available in as many pairs as possible, notably ETH/USDAO, BTC/USDAO, and many more.

Snapshot is at the forefront of innovating DAO participation by creating equitable and customizable participation structures across all DAOs for creating proposals, discussion, and voting. Snapshot helps Decentralized Autonomous Organizations to facilitate smooth and seamless financial transactions worldwide in a decentralized manner.

Snapshot has become widely popular among many DAO communities in the past year, which is used mainly as an off-chain multi-governance framework that enables gasless voting for DAOs while creating, and voting on proposals, which means the protocol doesn’t cost any precious ETH.

• Creating a proposal and voting for free.
• Flexible voting strategies: vote with ERC20s, NFTs, or any contract.
• Multiple voting systems: single choice, approval voting, quadratic voting and more.
• Snapshot Spaces can have their custom skin and domain name.
• Fully open source with GPL-3.0-or-later and MIT license.

A strategy is a JavaScript function which is used to return the score for a set of addresses. Strategies are often used on Snapshot to calculate the end result for a proposal. A proposal can have a single or multiple strategies. The default strategy in Snapshot is to calculate the balance of an ERC20 for each voter.

As per the Snapshot we have to add a voting strategy for our proposals. erc20-balance-of and Contract-call are the most used strategies. Here we can have multiple strategies and we can add custom strategies as well. We can add up to 5 strategies in our space.

Here we added our own customized token and there is a feature of editing the strategy by clicking on it once selected.

Snapshot supports a number of different voting types and they even plan to support many more in the future. It follows a distinct mechanism to ascertain the voting power of each vote. The voting power of each vote can be calculated via the strategy selected in the proposal by the voter.

1. Single Choice Voting - Under this system a voter can choose a single option among the various choices available to him. Under this case, the entire voting power would go to the selected choice.
2. Approval Voting - In this case, each voter can approve any number of choices and every selected choice would be given equal voting power.
3. Quadratic Voting - Herein, each voter may disperse his voting power across any number of choices and the results would be calculated quadratically.
4. Ranked Choice Voting - This is the most interesting voting type present in Snapshot. Here, each voter can rank any number of choices. Votes are initially counted for each voter's top choice.

In order to create a new proposal on Snapshot follow the below-mentioned steps

• Firstly, go to any project space and click on connect wallet in the top right corner of the window.
• Connect with wallet provider where you hold relevant tokens and thereafter click on “New Proposal”
• Fill out the Title and summary of your proposal. Mention all the required details.
• Go to the “Actions” box and select the Voting Type, start date and end date of your proposal. This would be the time period available to the users to vote for your project. Make sure you allow enough time frame for voting.
• Use the default Snapshot block number or you can change it as per your requirements. The block number is the snapshot where the balance of voters will be counted.
• Here comes the final step! Just click on “Publish” and your proposal is created!

Orange (Le Vote)- Here, Each vote is encrypted using a new encryption mechanism before submission.

• For each encrypted score in the vote, proofs are generated and stored. Everyone can use these proofs to verify the correctness and the eligibility of each submission without decrypting the content of the vote.
• This ensures the validity of the submitted votes in the counting process and at the same time it also maintains confidentiality.
• As this voting solution is based on blockchain, it secures the organization and results of a poll.
• Le Vote guarantees the secrecy of the vote by using a transparent and anonymous mechanism without any personal data being stored in the databases of the service providers and app developers.

OnVault is a decentralized borrowing protocol that allows you to draw interest-free loans against Ether used as Collateral. Loans are paid out in USDAO(a crypto backed stablecoin) and need to maintain a minimum collateral ratio of 110%.

In addition to the collateral, the loans are secured by a Stability Pool containing USDAO and by fellow borrowers collectively acting as guarantors of vaults created. Learn more about these mechanisms in our documentation.

OnVault as a protocol is non-custodial, immutable, and governance-free.

• Collateral: Collateral is any asset which a borrower must provide to take out a loan, acting as a security for the debt. Currently, OnVault only supports ETH as collateral.
• Debt: Amount of USDAO that the user borrows against the collateral.
• Vault: The position of ETH-USDAO created in the system when ICR > MCR.
• TCR: The Total Collateral Ratio is the sum of the collateral of all Vaults expressed in US Dollar, divided by the debt of all Vaultsexpressed in USDAO.
• MCR (Minimum Collateral Ratio): The minimum collateral ratio is the lowest ratio of debt to collateral that will not trigger a liquidation under normal operations (aka Normal Mode). This is a protocol parameter that is set to 110%
• ICR (Internal Collateral Ratio):Value of Collateral in USD / Number of USDAO borrowed
• CCR (Critical Collateral Ratio): CCR is when the TCR of the USDAO Pool falls below the 125%.
• Recovery Mode: When the USDAO Pool reaches CCR, then the system is said to be in Recovery Mode.
• Fees: There is a one-off fee (0.7%) whenever USDAO is borrowed.
• Staking: Users can deposit the USDAO Stablecoin in the OnVault Staking to earn interest and other benefits.
• ASSET: The incentive token generated to Stability Providers for staking USDAO. ASSET token is rewarded as per Quater-Life method to incentivise early adopters.
• Stability Pool: Onvault Staking funds are collected in Stability Pool is the first line of defense in maintaining system solvency. It achieves that by acting as the source of liquidity to repay debt from liquidated Vaults—ensuring that the total USDAO supply always remains backed.
• Liquidation: To ensure that the entire USDAO supply remains fully backed by collateral, Vaults that fall under the Minimum Collateral Ratio of 110% in the normal scenario, and when in Recovery Mode the Minimum Collateral Ratio of 125% will be liquidated (closed).
• Liquidator: The address that calls Liquidation function.

Stable-value assets are an essential building block for Ethereum applications and have grown to represent tens of billions of dollars in value.

However, the majority of the asset value is in the form of fiat-collateralized stablecoins like USDC and Tether. Decentralized stablecoins like DAI and sUSD make up only a small portion of the total stablecoin supply, meaning the majority of stablecoins are centralized and controlled by private issuers.

USDAO being a decentralized, transparent community driven and 100% crypto-backed stablecoin. So USDAO came up with a solution like OnVault which addresses this issue by creating a capital efficient and user-friendly way to borrow stablecoins. Furthermore, OnVault is governance-free, ensuring that the protocol remains completely decentralized.

OnVault’s key benefits include:

• 0% interest rate — as a borrower, there’s no need to worry about constantly accruing debt.
• Minimum Collateral Ratio of 110% — more efficient usage of deposited ETH
• Fully decentralized — OnVault contracts have no admin keys which means there are no admins to change anything in the contracts.

No. OnVault has no admin key, and nobody can alter the rules of the system in any way. The smart contract code is completely immutable.

1. Borrow USDAO against ETH by opening a Vault.
2. Secure OnVault by providing USDAO to the Stability Pool in exchange for rewards in ASSET Token.

To borrow USDAO, all you need is a wallet (e.g. MetaMask) and sufficient Ether to open a Vault and pay the gas fees.

To become a Stability Pool depositor , you need to have USDAO tokens. USDAO can be borrowed by opening a Vault or by minting with Ether from the USDAO pool. You can also use CEX or DEX where USDAO is listed inorder to buy USDAO.

There is a one-off fee whenever USDAO is borrowed. The fees cannot become smaller than 0.7% on Borrowing amount of USDAO. When the system is in Recovery Mode, there is no Fee for Borrowing USDAO.

To generate revenue using OnVault is by depositing USDAO to the Stability Pool (staking USDAO) and earn liquidation gains (in ETH) and ASSET in rewards.

As a non-custodial system, all the tokens sent to the protocol will be held and managed algorithmically without the interference of any person or legal entity. That means your funds will only be subject to the rules set forth in the smart contract code.

There are two scenarios under which you may lose a part of your funds:

• You are a borrower (Vault owner) and your collateral in ETH is liquidated. You will still keep your borrowed USDAO, but your Vault will be closed and your collateral will be used to compensate Stability Pool depositors(Stakers).
• You are a Stability Pool depositor(Stakers) and your deposited USDAO is used to repay debt from liquidated borrowers. Since liquidations are triggered any time borrowers’ collateral drops below 110%, you will receive more ETH in return with a very high probability. However, if ETH decreases in price and you maintain exposure, you may lose value in your total pool deposits.

OnVault protocol offers interest-free loans and is more capital efficient than any other borrowing protocol (i.e. less collateral is needed for the same loan). Instead of selling Ether to have liquid funds, you can use the protocol to lock up your Ether, borrow against the collateral to withdraw USDAO, and then repay your loan at a future date.

For example: Borrowers speculating on future Ether price increases can use the protocol to leverage their Ether positions, increasing their exposure to price changes. This is possible because USDAO can be borrowed against Ether, sold on the open market to purchase more Ether — rinse and repeat.*

*Note: This is not a recommendation for how to use OnVault. Leverage can be risky and should be used only by those with experience( an upcoming implementation in the USDAO Ecosystem).

The protocol charges one-time borrowing fees. Other systems (e.g. MakerDAO) require variable interest rates to make borrowing more or less favorable, but they do so implicitly that borrowers would not feel the impact upfront. Given that this also needs to be managed via governance, OnVault instead opts for a fully decentralized and direct feedback mechanism via one-off fees.

To borrow you must open a Vault and deposit a certain amount of collateral (ETH) to it. Then you can draw USDAO up to a collateral ratio of 110%. A minimum debt of 500 USDAO is required.

A Vault is where you take out and maintain your loan. Each Vault is linked to an Ethereum address and each address can have just one Vault. If you are familiar with Vaults or Collateralised Debt Positions(CDPs) from other platforms, Vaults are similar in concept.

Vaults maintain two balances: one is ETH acting as collateral and the other is a debt denominated in USDAO. You can change the amount of each by adding collateral or repaying debt. As you make changes in the balance, your Vault‘s collateral ratio changes accordingly. You can close your Vault at any time by fully paying off your debt.

Every time you draw USDAO from your Vault, a one-off borrowing fee is charged on the drawn amount and added to your debt. Please note that the borrowing fee of 0.7% is applicable under normal operation. The fee is 0% during Recovery Mode. A 200 USDAO Liquidation Reserve charge will be applied as well, but returned to you upon repayment of debt.

The Borrowing fee is added to the debt of the Vault, and the confined borrowing fee for USADO OnVault is 0.7%.

For example: The borrowing fee stands at 0.7% and the borrower wants to receive 4,000 USDAO to their wallet. Being charged a borrowing fee of 28.00 USDAO, the borrower will incur a debt of 4,228 USDAO after the Liquidation Reserve and issuance fee are added.

Loans issued by the protocol do not have a repayment schedule. You can leave your Vault open and repay your debt any time, as long as you maintain a collateral ratio of at least 110%.

This is the ratio between the Dollar value of the collateral in your Vault and its debt in USDAO. The collateral ratio of your Vault will fluctuate over time as the price of Ether changes. You can influence the ratio by adjusting your Vault’s collateral and/or debt — i.e. adding more ETH collateral or paying off some of your debt.

For example: Let’s say the current price of ETH is $3,000 and you decide to deposit 10 ETH. If you borrow 10,000 USDAO, then the collateral ratio for your Vault would be 300%. $$\ {10\ ETH*$3000 \over 10,000\ USDAO}*100\% = 300\% $$ If you instead took out 25,000 USDAO that would put your ratio at 120%.

The minimum collateral ratio (or MCR for short) is the lowest ratio of debt to collateral that will not trigger a liquidation under normal operations (aka Normal Mode). This is a protocol parameter that is set to 110%. So if your Vault has a debt of 10,000 USDAO, you would need at least $11,000 worth of Ether posted as collateral to avoid being liquidated.

To avoid liquidation during Recovery Mode, it is recommended to keep the ratio comfortably above 125% (e.g. 180% or better 220%).

You lose your collateral as your debt is paid off through liquidation, i.e. you will no longer be able to retrieve your collateral by repaying your debt. A liquidation thus results in a maximum net loss of 9.09% (= 100% * 10 / 110) of your collateral’s Dollar value.

When you open a Vault and draw a loan, 200 USDAO is set aside as a way to compensate gas costs for the transaction sender in the event your Vault being liquidated. The Liquidation Reserve is fully refundable if your Vault is not liquidated, and is given back to you when you close your Vault by repaying your debt. The Liquidation Reserve counts as debt and is taken into account for the calculation of a Vault’s collateral ratio, slightly increasing the actual collateral requirements.

By making liquidation instantaneous and more efficient, OnVault needs less collateral to provide the same security level as similar protocols that rely on lengthy auction mechanisms to sell off collateral in liquidations.

You can sell the borrowed USDAO on the market for ETH and use the latter to top up the collateral of your Vault. That allows you to draw and sell more USDAO, and by repeating the process you can reach the desired leverage ratio.

If Vaults are liquidated and the Stability Pool is empty (or gets emptied due to the liquidation), every borrower will receive a portion of the liquidated collateral and debt as part of a redistribution process.

The Stability Pool/ Onvault Staking is the first line of defense in maintaining system solvency. It achieves that by acting as the source of liquidity to repay debt from liquidated Vaults—ensuring that the total USDAO supply always remains backed.

When any Vault is liquidated, an amount of USDAO corresponding to the remaining debt of the Vault is burned from the Stability Pool’s balance to repay its debt. In exchange, the entire collateral from the Vault is transferred to the Stability Pool.

The Stability Pool is funded by users transferring USDAO into it (called Stability Providers). Over time Stability Providers lose a pro-rata share of their USDAO deposits, while gaining a pro-rata share of the liquidated collateral in ETH. However, because Vaults are likely to be liquidated at just below 110% collateral ratios, it is expected that Stability Providers will receive a greater dollar-value of collateral relative to the debt they pay off.

Stability Providers will make liquidation gains (see below) and rewards in form of ASSET tokens, which is also the Governance Token of the USDAO Ecosystem.

To ensure that the entire stablecoin supply remains fully backed by collateral, Vaults that fall under the minimum collateral ratio of 110% will be closed (liquidated).

The debt of the Vault is canceled and absorbed by the Stability Pool and its collateral distributed among Stability Providers.

The owner of the Vault still keeps the full amount of USDAO borrowed but loses ~10% value overall hence it is critical to always keep the ratio above 110%, ideally above 125%.

Anybody can liquidate a Vault as soon as it drops below the Minimum Collateral Ratio of 110%. The initiator receives a gas compensation (200 USDAO + 0.5% of the Vault ‘s collateral) as reward for this service.

The liquidation of Vaults is connected with certain gas costs which the initiator has to cover. The cost per Vault was reduced by implementing batch liquidations of up to 160 - 185 Vaults but with the aim of ensuring that liquidations remain profitable even in times of soaring gas prices the protocol offers a gas compensation given by the following formula:

gas compensation = 200 USDAO + 0.5% of Vault ‘s collateral (ETH)

The 200 USDAO is funded by a Liquidation Reserve while the variable 0.5% part (in ETH) comes from the liquidated collateral, slightly reducing the liquidation gain for Stability Providers.

As liquidations happen just below a collateral ratio of 110%, you will most likely experience a net gain whenever a Vault is liquidated.

Let’s say there is a total of 1,000,000 USDAO in the Stability Pool and your deposit is 100,000 USDAO. Now, a Vault with debt of 200,000 USDAO and collateral of 400 ETH is liquidated at an Ether price of $545, and thus at a collateral ratio of 109% (= 100% * (400 * 545) / 200,000). Given that your pool share is 10%, your deposit will go down by 10% of the liquidated debt (20,000 USDAO), i.e. from 100,000 to 80,000 USDAO.

In return, you will gain 10% of the liquidated collateral, i.e. 40 ETH, which is currently worth $21,800. Your net gain from the liquidation is $1,800.

Note that depositors can immediately withdraw the collateral received from liquidations and sell it to reduce their exposure to ETH, if the USD value of ETH is expected to decrease.

As a general rule, you can withdraw the deposit made to the Stability Pool at any time. There is no minimum lockup duration. However, withdrawals are temporarily suspended whenever there are liquidatable Vaults with a collateral ratio below 110% that have not been liquidated yet.

Onvault uses USDAO’s Oracle Module to determine the price of the ETH. Please check in our Docs

In General there is no possibility, as USDAO and OnVault are built in a way they are always over collateralised, but when the liquidations will occur at a collateral ratio well above 100% most of the time, it is theoretically possible that a Vault gets liquidated below 100% in a flash crash or due to an oracle failure. In such a case, you may experience a loss since the collateral gain will be smaller than the reduction of your deposit.

If USDAO is trading above $1, liquidations may become unprofitable for Stability Providers even at collateral ratios higher than 100%. However, this loss is hypothetical since USDAO is expected to return to the peg, so the “loss” only materializes if you had withdrawn your deposit and sold the USDAO at a price above $1.

If the Stability Pool is empty, the system uses a secondary liquidation mechanism called redistribution. In such a case, the system redistributes the debt and collateral from liquidated Vaults to all other existing Vaults. The redistribution of debt and collateral is done in proportion to the recipient Vault’s collateral amount.

ASSET is the secondary token issued by the USDAO protocol. This is the reward Token to gain for staking USDAO in the Stability Pool of USDAO OnVault. This also acts as a Governance token for USDAO Ecosystem.

Yes, ASSET is a governance token.

ASSET is earned in two ways:

• Depositing USDAO into the Stability Pool/OnVault Staking.
• Through token sale at the time of ASSET launchpad.

ASSET Token holders can use their tokens in governance to participate in the community decisions of USDAO ecosystem

The OnVault system incorporates a secondary token, called ASSET Token. The ASSET token is the governance token of the USDAO ecosystem, the ASSET token will play an important role in taking the decisions in the USDAO ecosystem by Creating/Voting Proposals through USDAO Governance Protocol (SnapShot). The USDAO holder must put their USDAO in the stability pool to earn ASSET Token as reward. The ASSET token will be distributed to the Stability Providers through a continuous time-based manner.

Stability Providers earn ASSET tokens continuously over time, in proportion to the size of their deposit. This is known as “Community Issuance”, and is handled by CommunityIssuance.sol smart contract.

Upon system deployment and activation, CommunityIssuance holds an initial ASSET supply, currently (provisionally) set at 2 million ASSET tokens.

The overall community issuance schedule for ASSET is sub-linear and monotonic. We currently (provisionally) implement a yearly “Quarter-Life” schedule, described by the cumulative issuance function: $$\ supplyCap*(1-0.75^t) $$ Where t is year and supplyCap is (provisionally) set to represent 2 million ASSET tokens.

It results in the following cumulative issuance schedule for the community ASSET supply:

The shape of the ASSET issuance curve is intended to incentivize both early depositors, and long-term deposits.

Although the ASSET issuance curve follows a yearly Quarter-Life schedule, in practice the CommunityIssuance contract uses time intervals of one minute, for more fine-grained reward calculations.

The continuous time-based ASSET issuance is chunked into discrete reward events that occur at every deposit change (new deposit, top-up, withdrawal), and every liquidation, before other state changes are made.

In an ASSET reward event, the ASSET tokens to be issued is calculated based on time passed since the last reward event, (block.timestamp - lastAssetIssuanceTime), and the cumulative issuance function.

The ASSET tokens produced in this issuance event are shared between depositors, in proportion to their deposit sizes.

To efficiently and accurately track ASSET gains for depositors as deposits decrease over time from liquidations, we re-use the algorithm for rewards from a compounding, decreasing stake. It is the same algorithm used for the ETH gain from liquidations.

No. ASSET could only be earned by the methods mentioned above.

Recovery Mode kicks in when the Total Collateral Ratio (TCR) of the system falls below 125%. During Recovery Mode, Vaults with a collateral ratio below 125% can be liquidated. Moreover, the system blocks borrower transactions that would further decrease the TCR. New USDAO may only be issued by adjusting existing Vaults in a way that improves their collateral ratio, or by opening a new Vault with a collateral ratio>=125%. In general, if an existing Vault’s adjustment reduces its collateral ratio, the transaction is only executed if the resulting TCR is above 125%.

The goal of Recovery Mode is to incentivize borrowers to behave in ways that promptly raise the TCR back above 125%, and to incentivize USDAO holders to replenish the Stability Pool. Economically, Recovery Mode is designed to encourage collateral top-ups and debt repayments, and also itself acts as a self-negating deterrent: the possibility of it occurring actually guides the system away from ever reaching it. Recovery Mode is not a desirable state for the system.

While in Recovery Mode the borrowing fee is set to 0% to maximally encourage borrowing.

By increasing your collateral ratio to 125% or greater, your Vault will be protected from liquidation. This can be done by adding collateral, repaying debt, or both.

Yes, you can be liquidated below 125% if your Vault’s collateral ratio is smaller than 125%. In order to avoid liquidation in Normal Mode and Recovery Mode, a user should keep their collateral ratio above 125%.

In Recovery Mode, liquidation loss is capped at 110% of a Vault’s collateral. Any remainder, i.e. the collateral above 110% (and below the TCR), can be reclaimed by the liquidated borrower using the standard web interface. This means that a borrower will face the same liquidation “penalty” (10%) in Recovery Mode as in Normal Mode if their Vault gets liquidated.

As mentioned earlier the prime motivation to build USDAO was to create a stablecoin that could ease-out business processes with transparency, governance and decentralization. A stablecoin that could be easily integrable with minimum hassle and should enable multiple business use cases. We have identified various use cases for USDAO stablecoin along with their roadmaps.

ICOs (Initial Coin Offering) were a big deal back in 2017. It is a great concept but lacks security. However, since anybody could launch their own ICO with little technical knowledge, hundreds of untrusted and Ponzi schemes flooded the ICO market which soon became scams. With the vision to secure ICOs and uplift valuable startups with true potential, we intend to provide a trustless platform for both legitimate startups and global investors. The platform shall harness the true potential of smart contracts and enable the funding of startups with USDAO stablecoins as input. To prevent the ICO mistake and safeguard the investors’ money, the investors shall invest into the startup smart contract rather than in startups directly. This way when startups do good, and their valuation increases, the valuation of startup tokens increases which investors may further redeem along with the profit. It is safer to invest in this platform than in an unknown ICO since the investment goes to a pool of startups all of which are being mentored and incubated by reputed incubators.

The Funding Tree project is a truly decentralized launchpad platform that is governed by the community, so the community will decide which project should get listed and which project should raise how much amount all through governance. The financial architecture is powered by the USDAO stablecoin itself.

The dream of a truly global stablecoin cannot be achieved unless it replaces fiat currencies as the preferred payment asset. We intend to provide the merchants of the world with the enormous potential of blockchain technology in its most simplified form. We envisioned providing a better and safer payment method alternative to the giant but centralized fiat institutions.

We are offering simple APIs and widgets that can be used to quickly start accepting payments in USDAO across the globe. Like popular centralized payment channel services like Apple Pay and Google Pay, we would soon provide a web interface with rich transaction data and other essential information regarding payment activities.

We see an immense potential in the economics involved in the gaming industry. The concept of tokens and payments has existed even before the existence of stablecoins. And as such there cannot be any better marriage of the blockchain and gaming industry as it not only makes the gaming experience safer but also trustless.

More importantly, the true potential of using USDAO stablecoin with games comes from the fact that more smart contracts can be developed on top of gaming logic integrating more complex yet rich gaming features using USDAO stablecoin and NFT implementation to pay revenues to the content owner.

A USDAO integration into a metaverse based games shall provide an opportunity for trustless token economics including in-app purchases and asset transfers. In games that require trust, such as betting, users can participate honestly and with the assurance of fair gameplay.

Create and sell anything as digital assets. USDAO NFT Marketplace is an e-commerce platform for exchanging all the digital assets as NFT across different domains, not only art! The integration of the USDAO protocol with NFT applications provides a variety of platform and economic token opportunities, which include in-app purchases and asset transfers as some of the potential use cases. Buy Bid Sell Trade on the go.

A new age staking model with USDAO stablecoin, where users can earn from 40% to 180% interest in native use case tokens launched by USDAO ecosystem platforms. Making sure you never lose your capital.

A One-stop destination to swap tokens in between different blockchains, Universal swap is the first CEX-DEX hybrid swap that leverages both of its liquidity from CEX and DEX (decentralized exchange) to get you the best price.

Send money, anytime, anywhere for any cause with complete tracking through USDAO. Using our remittance service, users can send USDAO stablecoins to any part of the globe within seconds with minimal transaction fees. The application ensures no party can cheat the other, hence, ensuring everyone’s monetary interests.

StableDAO is among the top decentralized cross chain reserve currency protocols that is inspired by the model of OlympusDAO . StableDAO also introduces economic and game theory dynamics into the market through staking and bonding. Moreover, it brings in the power of compounding through the dynamic rebasing technique, and it is backed by USDAO stablecoin. StableDAO's primary motive is to own its liquidity and also be collateralized(bonding) through USDAO which is the world's first truly decentralized stablecoin.

Make great returns on a bear market by investing and staking on StableDAO.

The USDAO ecosystem will be launching with ether for minting USDAO and collateralization purposes on Ethereum blockchain for the USDAO Pool with audited smart contracts.

The USDAO Pool will be upgraded to operate on multiple blockchains like Binance smart chain Polygon, Algorand, Cardano, Solana, Polkadot, and Kasuma. This will make USDAO a multi-chain stablecoin operable on the above blockchain ecosystems.

The ecosystem will start accepting multiple cryptos as collateralization making USDAO Multi-collateral USDAO (MCU). This milestone will enable diversification of the minting/burning process of USDAO. The tokens/coins that will exist on the platform will be approved through governance.

The USDAO ecosystem will create Crypto indexes that will leverage high-performing cryptocurrencies, Machine learning, and AI (Artificial Intelligence) for making sure the USDAO pool is collateralized i.e. like the S&P500 index with Auto Asset Management.

For example

1. Market Leaders: Top 10 crypto’s which have the highest market cap will be picked to form a basket of crypto’s to make sure the USDAO pool always has enough liquidity to pay off users.

2. Underdogs: USDAO pool will create an index fund that will include the most promising cryptocurrencies for the collateralization process. This is to create a strong visibility of the upcoming project in the crypto space while making the USDAO pool collateralized using the underdogs crypto class.

3. CBDC (Central Bank Digital Currency): The USDAO ecosystem welcomes CBDC, it will integrate CBDC (with Independent Forex Reserve pairing) in the USDAO Pool with the respective country, which will make the USDAO ecosystem a marketplace for multi-country CBDC liquidity pool with USDAO. This will not only keep USDAO value at $1 but will also ensure liquidity for cross CDBC exchanges without any external government KYC.

All the above implementations will take place following governance voting for each protocol. More details will be provided during the proposal for voting on the proposed protocol for community decision.

We are excited to inform the developer community that we would be regularly hosting several events like hackathons, seminars, and online tutorials to spread and share our knowledge with everyone. We are looking forward to seeing independent programmers build applications on top of USDAO stablecoin and amaze us with their solutions.

To simplify the development process, we have developed a separate section for developers. The section will include necessary documentation, SDKs, widget integration, code examples, and everything relevant for further development.

We also host a platform to fund budding startups. A major part of the funding shall happen with the stablecoin itself. We invite innovators and crazy minds from all around the world to share their ideas or applications built on top of USDAO stablecoin. We are ready to fund the next million-dollar idea.

USDAO is designed to assist developers and enterprise organizations in creating innovative and novel new products and services, empowering businesses to implement low-cost and highly accessible cross-border remittance solutions. The extensive Software Developer Kits (SDK's) which have been made available ensure that development teams are able to quickly and efficiently implement core USDAO protocol functions into their existing infrastructure without cost or limitation.

USDAO provides an interesting and powerful alternative to the biggest stablecoins in the market. Many of these existing stablecoins are centralized, developed and managed by individual companies and consortiums which include legacy banking interests, and which suffer from lack of transparency, particularly around the question of liquidity, and legitimate collateral backing and this makes them risky. Furthermore, some of the existing decentralized stablecoins require users to provide excessive collateralization and they carry the risk of liquidation penalty. The intelligent design of the USDAO protocol ensures cryptocurrency traders have access to a secure and fully backed stablecoin which meets their day-to-day needs when trading markets.

The USDAO protocol provides the basis for cross-border remittance at high speed and low-cost, allowing government bodies and NGO's to quickly deploy solutions which requires quick movement of large sums of money at high speed, and outside of the BIS (Bank of International Settlements) and SWIFT. This could greatly benefit smaller nations, which may be encumbered by larger competitors.

USDAO provides a solution allowing retail holders of cryptocurrency to securely hold funds in a dollar-pegged manner which is outside of the purview of the banking institutions and governmental bodies. This ensures that retail users are in full control of their finances without having to rely on centralized bodies.

Furthermore, for many of the worlds approximately 2 Billion people who are unbanked or underbanked individuals, the USDAO protocol allows access to the global market without the need for identity verification, which is often one of the major barriers to entry.

This protocol is designed to solve the crucial problem of the stable exchange of value in the crypto ecosystem. It is the mandate of stabilization and flexibility of minting/redeemable for $1 worth of collateral and the (ASSET) token at the collateral ratio.

The USDAO stablecoin has been designed keeping the business experience in mind. Whether you are a businessman, or an investor, a merchant, an entrepreneur, or an institution, USDAO has been designed to meet everyone’s needs. We offer the best possible solution to keep the pegged price stable at 1 USD with the lowest transaction fees.

We also offer staking features for long-term investors and supporters of this project rewarding them assured returns for their loyalty. The system is run by a global and decentralized community. Anyone can acquire governance tokens and participate in the decision-making body of the USDAO stablecoin project. We are proud of the work we have done, and we intend the global community to run and govern it for the welfare of open source scientific development and advancement

[1] Compound Governance

[2] USM Medium - https://jacob-eliosoff.medium.com/

[3] Satoshi Nakamoto. Bitcoin: A Peer-to-Peer Electronic Cash System, 2009. URL http://www.bitcoin.org/bitcoin.pdf.

[4] Vitalik Buterin. Ethereum White Paper, 2014. URL https://github.com/ethereum/wiki/wiki/White-Paper.

[5] Bancor whitepaper. URL https://whitepaper.io/coin/bancor

[6] The Rise of Stablecoins.pdf - https://f.hubspotusercontent00.net/hubfs/5264302/The%20Rise%20of%20Stablecoins.pdf

[7] Why Stablecoins Are On The Rise - CB Insights Research - https://www.cbinsights.com/research/stablecoins-institutional-media-interest/

[8] Liquidity Protocol : https://docs.liquity.org/

[9] Snapshot Governance : https://docs.snapshot.org/