FAQ

What Is the Purpose of the Security Deposit?

The Security Deposit is to force the user to validate his action.

What Are the Fees on the USDN Protocol?

The main fees on the USDN Protocol include:

• Actions Fees: Fees are collected when you interact with the USDN Protocol. These fees are collected by the vault to maintain the USDN’s stability and increase its yield.

• Funding Rats Fees: The Funding Rate in the USDN Protocol is a dynamic fee mechanism that incentivizes balance between Longs and the USDN Vault by charging the larger side based on the relative imbalance, ensuring market equilibrium.

Click here if you want to learn more about fees.

What Are the Main Risks of the USDN Protocol?

• could lead to their positions being liquidated.

• Oracle Risk: The Protocol relies on oracles to provide up-to-date prices for the underlying asset. Manipulation or failure of these oracles could impact mint and redeem operations.

• Smart Contract Risk: Like any decentralized protocol, USDN depends on smart contracts, which can be vulnerable to security breaches. Regular audits are conducted to minimize this risk, but it cannot be entirely eliminated.

Can I Validate Multiple Pending Actions Simultaneously on the USDN Protocol?

The USDN Protocol processes one action at a time, requiring each initiated action to be validated before starting another. This ensures orderly and conflict-free transactions.

How Does the USDN Rebase Work?

USDN rebase activates above $1.005, automatically increasing wallet balances to reward holders and maintain stability around $1. There is no balance and total supply adjustment (debase) if the price falls below $1, as the yield is expected to bring it back up relatively quickly.

What Are the Benefits of Holding USDN Compared to a Traditional Stablecoin?

USDN is designed as a decentralized synthetic dollar, meaning it does not rely on physical dollar reserves like traditional stablecoins. It offers potential yields through Funding Rates and potential underlying asset rewards, making it attractive for users looking to generate yield while maintaining dollar exposure.

What Is the Difference Between Collateral and Trading Expo in the USDN Protocol?

• Collateral: The real portion of a Long trader’s position, which can be withdrawn at any time as long as it is not liquidated.

• Trading Expo: The synthetic portion of the exposure resulting from leverage. It increases potential gains or losses but cannot be directly withdrawn by the trader.

Together, these two components form the Total Expo.