USDP Stablecoin (USDP)

From DefiLlama
Jump to navigation Jump to search

USDP is a decentralized and unbiased stablecoin whose value is soft-pegged to US Dollar. It’s fully-backed by collateral, in the form of third-party cryptoassets, stored in the Unit Protocol.

All circulating USDP are generated within the system of the Unit Protocol, that allows a user to mint the stablecoin. The user can lock any amount of the asset, which the protocol accepts as collateral and borrow the USDP stable in return. As a result, the user will obtain some amount of liquidity in order to use that liquidity as an additional income tool without selling their asset.

The repayment of the debt and collateral withdrawal can be performed at any time after a debt position has been opened. USDP is destroyed when loans are paid back.

How to mint USDP

  1.   Choose token (collateral) in the list of available tokens as collaterals.
  2.   Scroll down to Deposit collateral & Borrow USDP and enter the amount of tokens you want to use or click on Max to see the amount of USDP you can borrow for the tokens you’ve chosen to use.
  3.   Choose the level of risk you’re ready to accept on this position by using the slider or the presets (25%, 50% etc).
  4.   Input numbers depend on your preferences and press Execute.
  5.   Sign the transaction with Metamask or another wallet you utilize.
  6.   Now you can use your USDP! Buy more tokens, swap it for fiat, stash it in a vault and not only that.
  7.   To pay back your USDP loan, click on Repay USDP & Withdraw collateral.

How the peg works

  • Every USDP issued is over-collateralized. It's backed by collateral in the Unit Protocol. This means that the value of the provided collateral is higher than the value of USDP in circulation at any given point of time. This principle is based on ICR (Initial collateral ratio).
  • USDP attempts to maintain a value of $1.00 US. There is a free-floating peg, considering that the value of USDP may still experience slight fluctuations explained by the economics of supply and demand. USDP sustains its stability through a combination of external (market) and internal forces, and incentives used by DUCK token holders and the Unit Protocol team.
  • The moment a user pays off their loan, the deposited collateral is unblocked and the returned USDP tokens are burned. If the user has been liquidated, the collateral is up for auction and paid out by the auction participants with USDP tokens, which are burned in the same way.


When you borrow USDP on Unit Protocol, there are are three fees which you need to keep in mind:

Stability fee

  • You have to pay a stability fee every time you deposit a collateral to borrow USDP.

Liquidation fee

  • When you borrow USDP, you can choose the level of risk on your loan. The higher the risk, the more you can borrow.

Issuance fee

  • This is the percentage charged every time you borrow USDP. All issuance fees collected will go to developing the project. For example, if the issuance fee is 0.9% and you want to get 10 USDP, you'll have to issue (10 / 0.9991) USDP. 10 USDP will go to you, and the remaining amount will go to the development fund.