WUSD is different from other stablecoins that are fiat-backed or algorithmic stablecoins. In WUSD's case the stablecoin is backed by crypto-assets within a sustainable mechanism. The stablecoin is backed by USDT and Wault Finance's native token WEX at a ratio of 9:1. This means that 90% of WUSD is collateralized by USDT deposits and the remaining 10% from WEX. This ensures the stability of the stablecoin and guarantees that holders do not lose more than 10% of their capital in the worst-case scenario of extreme volatility. WUSD’s process is as follows. Let's assume a trader deposits 1000 USDT to purchase WUSD. 900 USDT is deposited by the smart contract to WUSD’s Treasury, and the remaining 100 USDT is used to buy WEX tokens. The two tokens are held in the Treasury, and the protocol deploys a portion of that to generate yields to reinforce the Treasury. This ensures that WUSD is always backed by enough collateral, while also earning yields in the background to reinforce the...
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