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How USB Works

USB (Universal Stable Bottling? / Stabolut Stable) is a synthetic dollar protocol built on Ethereum. It provides a crypto-native solution for money that is not reliant on traditional banking infrastructure.

The Mechanism​

USB maintains its $1 peg through a delta-neutral hedging strategy.

  1. Minting: When a user deposits $1 worth of collateral (e.g., stETH), the protocol mints 1 USB.
  2. Hedging: Simultaneously, the protocol opens a corresponding short position of $1 value in the derivatives market (e.g., ETH-PERP).
  3. Stability:
    • If ETH price drops by 10%, the collateral loses value, but the short position gains an equivalent amount.
    • If ETH price rises by 10%, the collateral gains value, but the short position loses an equivalent amount.
    • The net value of the backing portfolio remains stable at $1, securing the USB peg.

Yield Generation​

Unlike fiat-backed stablecoins where yield is captured by the issuer, USB passes yield to the ecosystem:

  • Staking Rewards: From the underlying LST collateral (e.g., stETH).
  • Funding Rates: From the short futures positions (historically positive).

This combination creates the "Internet Bond" — a native dollar-denominated savings instrument.