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.