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DeFi hub Wault Finance has successfully launched its native stablecoin WUSD. WUSD is pegged to the dollar and is the first commerce-backed stablecoin in the crypto industry.
WUSD is designed based on the latest stablecoin models and backed by several crypto assets including USDT and WEX token at a 9:1 parity. This ratio means that 90% of the stablecoin is collateralized by USDT deposits and the remaining 10% by the utility token of Wault Finance: the WEX token.
The WUSD stablecoin works as follows. When a trader deposits 100 USDT to purchase WUSD. 90 USDT is deposited into the WUSD treasury while the remaining 10 USDT is used to buy WEX tokens.
The two tokens are then held within the treasury and the protocol deploys a portion to generate yields to reinforce the Treasury. This ensures that WUSD is stable and always backed with enough collateral while providing robustness to the treasury, guaranteeing the peg. This buyback and lockup method also raises the value of WEX, which raises APYs on Wault’s decentralized finance products such as WSwap, Wault’s top-ranked decentralized exchange on BSC and Polygon. Higher APYs then attract more users and capital, creating a positive cycle for the ecosystem. This is important because those products are involved in multiple stability mechanisms that reinforce the WUSD peg, which is the foundation of the term commerce-backed.
There are four mechanisms that ensure WUSD is stable and keeps its peg to the dollar: the Treasury, WSwap Trading Fees Support, WUSD Staking Support, and WEX Emissions Support. As part of the Trading Fees Support, 15% of the trading fees of WSwap are allocated towards the WUSD treasury. As WUSD price moves off peg, WEX emissions are also dynamically adjusted to flow into the Treasury and the WUSD-BUSD staking pool, stimulating demand and helping the peg stabilize.
WUSD is currently available on Wault Finance, and users can partake in staking WUSD-BUSD for up to 30% APY, or 124% APY using leverage on Alpaca.Finance. Since WUSD’s launch, more than $50 million has been staked in the WUSD-BUSD staking pool on BSC, and WUSD-USDC on Polygon.
The Wault Finance team has stated that additional staking pools will be launched in the future. There are also plans to list the stablecoin on other DEX platforms and to create further partnerships and use cases.
About Wault Finance
Wault Finance is a DeFi protocol that allows users to explore DeFi products on Binance Smart Chain and Polygon. Since launching in 2021, Wault Finance has become one of the most popular DeFi hubs for liquidity miners to stake their capital for rewards.
Wault Finance has been able to develop products that have proven popular within the DeFi sector. For example, Wswap Dex has over $300 million in TVL, making it one of the top DEXs on Binance Smart Chain and Polygon. Other products include Wault Launchpad, Wault Locker, and strategy vaults.