ERC20 Token Contract Addresses

• Ethereum L1: 0x677ddbd918637E5F2c79e164D402454dE7dA8619

• Hemi L2: 0x7A06C4AeF988e7925575C50261297a946aD204A8

• Base L2: 0x0937876EFd6C4101Be68cd89ba58D5Ecf0d53A64

Modules

• ERC20 token - the primary smart contract for VUSD

• Minter

• Treasury

• Governor

Overview

VUSD is self-backed, self-sustaining and self-pegging through stablecoin yield generated by its own internal treasury. Every 1.0 VUSD is backed by at least 1.0 of another stablecoin (e.g. USDT), which is maintained at a yield source (e.g. Compound USDT lending market).

VUSD mint and redeem operations input (during minting) and output (during redemption) collateral assets directly with the VUSD treasury. The treasury ensures that output assets are always immediately and readily available to fully satisfy all redemptions.

Peg Macroeconomics

The peg with USD is maintained through arbitragers' 1:1 swapping with other stablecoins.

If VUSD falls below $1.00 on the spot market, there becomes an incentive to buy VUSD, and then redeem for $1.00 via the VUSD treasury swapping redemption for an arbitrage profit.

If VUSD rises above $1.00 on the spot market, there becomes an incentive to mint VUSD via VUSD treasury swapping mint, and then immediately sell VUSD on the spot market for an arbitrage profit.

The VUSD treasury always maintains at least 1:1 backing of every VUSD, which ensures that redemption demand can be met sufficient to maintain the peg.

Token Supply Management

When VUSD is minted, the general VUSD treasury is on the other side of the swap, receiving the input assets. When VUSD is redeemed, the VUSD treasury swaps its internal assets for received VUSD. The VUSD received during redemption is burned, ensuring automatic management and accuracy of the total VUSD token supply. This ensures the token supply reflects the backing available in the VUSD treasury for any redemption at any time.

Answering Misconceptions

• VUSD is not a deposit/withdraw system, where users have a claim to treasury assets.

• VUSD does not contain auctions, liquidations, or debt obligations to users.

• VUSD is not an algorithmic stablecoin.

Governance

• VGOV token, to govern protocol decisions, compensated by protocol yield.

• Increase use of ungoverned modules, reducing governor scope down to token whitelistings and keeper selection.

  • ProxyRouter module: governed whitelisting module, which then routes to ungoverned per-token yield modules that handle treasury management for a specific ERC20 asset.

• Increase Keeper abilities to include (a) swapping Treasury assets from A to B, and (b) pushing excess yield to approved external addresses, such as a yield vault.

Use of Yield

• Protocol-owned liquidity

  • A focus on stable+volatile, such as VUSD-ETH pairs, to encourage both reachability and variance in the spot DEX markets.

• VGOV staking.

• Marketing and growth initiatives.

Theory

The goal for all contracts is to be ungoverned/permissionless, as a default. VUSD is progressively moving in this direction.

Whitelisting tokens for use in VUSD is a notable exception to this goal.

Token Whitelisting

One unavoidable choice is token whitelisting, choosing which Tranche 1 stablecoins and Tranche 2 coins and pools are acceptable within the VUSD system.

At present, token whitelisting, by virtue of selecting new Minter and Treasury contracts, is accomplished via a Vesper Finance pool ops multi-signature Gnosis Safe.

In the future, the goal is to move to a token-based voting governance system.

Website - https://vdollar.finance/

App - https://app.vdollar.finance/

vUSD Logo (64x64px SVG):

VUSD is a decentralized, collateral backed, USD-pegged stablecoin on Ethereum and EVM-compatible sidechains/L2s.

VUSD is open source, designed for simplicity and security, peg stability, self-sustaining, backed by over-collateralized, yield-generating cryptocurrencies. VUSD is fully auditable on-chain, with real-time proof of reserves available at all times.

VUSD's treasury and yield resides on Ethereum (L1), with bridges and extensions available on Layer 2 (L2) blockchains such as Hemi and Base.

VUSD may be accessed directly via smart contract, or via dapps such as: https://app.vdollar.finance/

Primary VUSD treasury operations are autonomous. Users initiate actions that swap assets into the VUSD treasury, and out of the VUSD treasury. For example, users swapping USDC for VUSD automatically cause the USDC to be routed to the VUSD treasury. Once assets are in the treasury's possession, they are automatically routed to governance-chosen token management modules, which generate yield. For example, the treasury's USDC is routed to Compound USDC lending market, which generates yield back to the VUSD treasury.

There are two tranches of VUSD Treasury:

• T1 Stable: For every 1.0 VUSD, there is always at least 1.0 USDC or USDT or DAI on Ethereum L1, deposited into a non-leveraged, trusted yield source such as Aave or Compound.

• T2 Growth: Any treasury assets beyond 100% VUSD circulating supply can be volatile assets, LP pair assets, or more aggressive growth protocols.

VUSD minting and redeeming is performed via the Minter module of the VUSD system. This can be accessed directly via smart contract, or via user interfaces such as https://app.vdollar.finance/

Minting

To mint VUSD, the user swaps an acceptable input asset (DAI, USDC, USDT) for newly minted VUSD at a 1:1 ratio, less minting fee (currently zero), in any amount with zero slippage. The input asset is deposited into VUSD's treasury, and the user receives VUSD as a swap output.

Redemption

To redeem VUSD, the user swaps VUSD for an acceptable output asset (DAI, USDC, USDT) based on Oracle price (DAI/USD, USDC/USD, or USDT/USD), less a redeem fee (current 0.1%), in any amount with zero slippage. VUSD is burned, and the user receives the requested output asset (DAI, USDC, USDT).