Mechanism

Step 1: Deposit wETH

Users start by depositing their wrapped Ethereum (wETH) into the UUSD ecosystem. wETH serves as collateral and is securely locked in a smart contract.

Step 2: Mint UUSD

Once wETH is deposited, users can mint UUSD, the algorithmic stablecoin. The smart contract calculates the appropriate amount of UUSD based on the value of the locked wETH collateral and the algorithmic stability mechanism.

Step 3: Receive Interest or Spend

UUSD holders have options for their stablecoin:

• Interest Generation: Users can choose to stake their UUSD to earn interest. The conversion of wETH into wrapped staked Ethereum (wstETH) through Liquid Staking Derivatives (LSD) generates this interest. The longer they hold and stake, the more they can earn over time.

• Spending: Users can freely spend their UUSD within the DeFi ecosystem or use it for various transactions, investments, or payments.

Step 4: Mint UZAR (Remittance) or Offramp to Fiat

For users looking to address remittance challenges, UZAR comes into play:

• Minting UZAR: Users can mint UZAR using their UUSD. This stablecoin is pegged to the South African ZAR rand and is designed to facilitate cost-effective and efficient remittances to Africa.

• Offramp to Fiat: Users who wish to convert their UUSD to traditional fiat currencies can do so through supported offramp services, ensuring liquidity and accessibility.

Step 5: DeFi (Leverage, Yield Farm, Liquidity Provider)

UUSD holders can further engage with DeFi opportunities:

• Leverage: Those seeking leverage can use their UUSD as collateral for borrowing additional assets to amplify their investments.

• Yield Farming: Users can participate in yield farming protocols to earn rewards by providing liquidity to DeFi platforms.

• Liquidity Provision: UUSD holders can supply liquidity to decentralized exchanges (DEXs) and earn fees as liquidity providers.

STEP 6 - Redemption Process

If a user wants to get their wETH collateral back, here's how it works: You return your UUSD tokens to the smart contract. The contract then figures out how much wETH you should receive based on the current price of ETH. This way, it ensures a fair exchange for you.

These six steps create a comprehensive mechanism that allows users to leverage their assets effectively within the UUSD ecosystem, providing stability, value preservation, and diverse DeFi opportunities.