How It Works
Users deposit USDC, USDT, or DAI to mint U at a 1:1 ratio. The deposited stablecoins are deployed across curated yield strategies — Aave, Compound, Morpho, and DSR — according to risk-weighted allocation determined by the protocol's risk engine. U maintains a 1:1 peg through direct redemption: holders can redeem U for the underlying basket at any time. The protocol charges a small management fee (typically 0.5% annually) from the generated yield. Governance controls rebalancing parameters, whitelisted protocols, and allocation limits.
Backing Type: Meta / Basket
Meta or basket stablecoins hold a diversified portfolio of other stablecoins and yield-bearing instruments. This diversification reduces single-point-of-failure risk while maintaining dollar peg stability through weighted basket composition.