How does USDaf work?
Last updated
Last updated
Introducing USDaf
Welcome to the new stablecoin era.
What is USDaf?
USDaf is a synthetic dollar, part of a collateralized debt position (CDP), backed by Ampleforth’s SPOT — a low-volatility commodity money token, also known as a “flatcoin.” SPOT is designed to adjust its value to track inflation.
For more information on SPOT, check out the SPOT Primer.
How does USDaf work?
Users can deposit SPOT as collateral into the protocol and mint USDaf against it. What sets USDaf apart is that users can customize their loan-to-value (LTV) ratio and interest rate, offering a high degree of user flexibility.
As SPOT is designed to increase in value over time by tracking inflation, the value of the collateral typically rises, reducing the LTV without needing additional collateral. This allows users to either “set it and forget it” or borrow more USDaf as needed.
Adopting the SPOT mechanism within USDaf’s infrastructure facilitates a stablecoin that is permissionless, decentralized, and fully customizable, all while outpacing inflation. Asymmetry aren’t the only ones that share this philosophy:
