DUS Yield

What is DUS yield?

The Protocol can create and distribute additional DUS to its owners as the yield on a pro-rata basis. The rate represents a growth percentage by which DUS will appreciate on a daily basis. Appreciation in this context means an increase in DUS Supply.

Why do we need this?

To ensure DUS is aligned with DUCA and through the yield on DUS enable DUS to be the effective hedge to USD.

How does it work?

The DUS Yield is not distributed by DUCATA and does not indicate or represent a promise or return on investment in DUS. Any distribution of yield will happen on a pro-rata basis to all owners in accordance with the stake of each individual DUS owner. The distribution of DUS Yield will follow the available collateral value (DUCA in DUS Reserve) that exceeds the various threshold values.

The Funding Ratio of DUS is primarily influenced by the DUCA Exchange Value and the DUCA Yield that is added over time to the DUS Reserve. Whenever the actual Funding Ratio exceeds the Funding Ratio Requirement additional DUS will be minted equal to the excess collateral and distributed pro rata to all DUS owners. This means that the DUS Yield responds positively when the value of USD lowers (based on the DUCA Exchange Value and inflation) compared to DUCA.

Additionally, the excess FRR when the supply lowers. This all benefits the remaining DUS and adds to the strong incentives of DUS.

Initially, the minimum DUS Yield to be distributed is equal to 65% of the DUCA Yield at any given moment. This effectively means that the DUS Yield is pegged to the DUCA Yield. This peg concerns a minimum and therefore can be higher if the collateral required for that, more collateral than the target FRR with seDUS at 0, is present.

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