Collateral
Last updated
Last updated
Perennial is built upon the stablecoin: Digital Standard Unit (DSU).
Think of it as USDC+. DSU has all the properties of USDC + additional censorship-resistance properties that protect users of DSU & the protocols that build upon it.
Properties of DSU:
Fully collateralized
100%+ backed by USDC (and 1:1 redeemable for USDC)
Trust-minimized USDC
DSU is a wrapped version of USDC (deposit 1 USDC, get 1 DSU). DSU is an ERC-20 that can that can then be used in DeFi and redeemed at any time for 1 USDC.
When the DSU protocol receives USDC, it deposits it into a DeFi protocol (namely Compound) that is liquid, battle-tested, and safe from a regulatory perspective.
The core benefit of this: DSU wrapping minimizes trust assumptions in dollar-backed stablecoins (without impacting UX) and reduces risk associated with upstream protocols, making it an ideal stablecoin primitive to build upon.
Most Perennial users will not have to directly interact with DSU. When a user uses the Perennial frontend with USDC as collateral, Perennial automatically wraps USDC into DSU and deposits the DSU into the protocol. When a user withdraws their collateral, Perennial will unwrap the DSU and return USDC to their wallet.
If a user is directly interacting with the Perennial smart contracts, they will need to obtain DSU to open Maker/Taker positions. This can be done by wrapping/unwrapping directly through the DSU smart contracts (). Alternatively, for gas efficiency, developers can use the Batcher contract (see Deployed Contracts) to wrap/unwrap.
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