> For the complete documentation index, see [llms.txt](https://dynamoteam.gitbook.io/dynamo-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://dynamoteam.gitbook.io/dynamo-whitepaper/how-dynamo-works/dusd.md). # dUSD dUSD is a stablecoin generated through asset collateralization in Dynamo, the decentralized liquidity provisioning protocol built on BNB Chain. In Dynamo, synthetic assets, including dUSD, are collateralized by stakers using BTC, BNB, ETH . When holders stake their tokens as collateral, they can mint dUSD, which is the stablecoin in the Dynamo ecosystem. The collateralization process involves locking collateral tokens in a staking contract, which enables the issuance of synthetic assets like dUSD. Stakers incur debt when they mint dUSD and must pay back this debt by burning dUSD to unlock their collateral tokens. The amount of debt a staker owes is determined based on the fluctuating value of the debt pool. If the debt pool value increases, the staker's debt also increases proportionally. The minting and burning of dUSD are performed through smart contracts. When a staker mints dUSD, the contract instructs the dUSD contract to issue the newly minted dUSD to the staker's wallet. Conversely, when a staker burns dUSD, the required amount of dUSD is burned, and the staker's debt is reduced accordingly. The stability of dUSD is maintained through the collateralizations. The value of collateral serves as the backing for dUSD, ensuring its stability as a stablecoin. The collateralization ratio (C-Ratio) is monitored to ensure that sufficient collateral is available to absorb price shocks. If the C-Ratio falls below the target ratio, stakers are incentivized to take actions to maintain it. It is important to note that the current architecture of Dynamo, including the collateralization mechanism and the use of oracles for price feeds, is still experimental and carries certain risks. However, risk mitigation strategies are in place, and the system is designed to align incentives for all participants. dUSD is a stablecoin generated through asset collateralization in Dynamo. It is minted by staking collateral tokens and can be burned to unlock the staked collateral . The collateralization ratio is maintained to ensure stability, and risk mitigation strategies are in place within the protocol. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://dynamoteam.gitbook.io/dynamo-whitepaper/how-dynamo-works/dusd.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.