A few days ago, we introduced USDA, Angle’s upcoming USD stablecoin.

If it’s the first time you've heard of USDA, know that USDA will be the most complete & reliable yield-bearing USD stablecoin. It will offer a savings solution, the same liquidity as USDC, cross-chain availability, borrowing & leverage features and advanced anti-depeg mechanisms. With USDA, and EURA (formerly agEUR), Angle Protocol will lead the charge in creating the most robust and streamlined onchain foreign exchange (forex) hub.

But how will USDA work concretely? What are the mechanisms behind the stablecoin?

Here is everything you need to know.

USDA is going to be a composable piece of infrastructure relying on different modules through which the stablecoin can be minted.

veANGLE holders will play a central role in USDA composability. They will vote, govern and parametrize. Any new minting module — which allows the creation of additional USDA — could be added, revoked, amended and updated at any time through onchain governance votes. All changes will be fully transparent. Before any update, there will be a 24-hour timelock allowing stakeholders to anticipate any decisions they may not agree with.

Each module will have its own trade-offs, unique features, and risks. The Angle DAO will be advised by an independent Asset Liability Management Committee responsible for ensuring sound risk management and an approach to handle all these modules, how users interact with each other, and the management of every module.

Now, let's break down the different modules.

The Transmuter is the most important component of the USDA infrastructure, serving as a Price Stability Module. It will empower users to effortlessly swap a whitelisted collateral asset for the stablecoin at its oracle value, with no fees. Conversely, it will allow for the redemption or burning of USDA in exchange for one or all of the collateral assets in the backing.

Thanks to the Transmuter, users will be able to seamlessly mint and burn USDA from USDC without incurring any fees or experiencing slippage. The system will automatically monitor its exposures to the assets held in reserves. Advanced rebalancing mechanisms will ensure that Angle Protocol avoids overexposure to any single asset, while also incentivizing market makers to restore reserves to their target exposures.

As part of this mechanism, Angle will integrate tokenized securities, T-bills and DeFi yield-bearing assets into the backing, allowing the Protocol to generate yield on its reserves.

Thanks to the Transmuter, users will be able to seamlessly mint and burn USDA from USDC without incurring any fees or experiencing slippage. The system will automatically monitor its exposures to the assets held in reserves. Advanced rebalancing mechanisms will ensure that Angle Protocol avoids overexposure to any single asset, while also incentivizing market makers to restore reserves to their target exposures.

As part of this mechanism, Angle will integrate tokenized securities, T-bills and DeFi yield-bearing assets into the backing, allowing the Protocol to generate yield on its reserves.

The Transmuter mechanism was designed following the USDC depeg incident in March 2023. It comes with robust anti-depeg features, ensuring that Angle stakeholders will be better off during a black swan event compared to any other similar stablecoin protocol.

Why do we call this Transmuter a Price Stability Module?

This is because arbitrageurs can leverage deviations of USDA prices from the peg on the secondary market to earn a profit.

The Angle Lending AMO (Algorithmic Market Operations) and the Borrowing module are two different systems with the same functions: borrow stablecoins.

In the Lending AMO, Angle will lend pre-minted USDA in dedicated lending protocols such as Euler. In the Borrowing module, the Protocol will open credit lines to users, allowing them to borrow the stablecoin against whitelisted collateral assets.

These systems will enable people to get USDA loans with stable or low volatility interest rates, and then leverage this borrowed capital to reinvest and increase their exposure to yield bearing assets like Liquid Restaking Tokens (LRTs).

On top of these systems, the Protocol will offer USDA flash loans. Users will be able to borrow USDA for free and pay back tokens in a single transaction.

The Protocol will earn a yield through the Transmuter and the Borrowing systems. Part of those earnings generated by the Protocol will be directed towards a native Dollar Savings solution.

For instance, if the Protocol has $100 in assets backing 100 USDA stablecoins, and it earns a 5% interest rate on those reserves, it can then mint 5 additional USDA tokens annually. These additional USDA will be automatically allocated to users who participate in Angle Savings solution called stUSD.

This automatic allocation is made possible by the minting rights embedded in the contract.

The Protocol will retain a portion of the yield generated by the assets in reserves to safeguard USDA holders in case of black swan events and to build up a surplus for veANGLE holders.

USDA's standout feature is its upcoming forex capabilities. With USDA and EURA, Angle will be able to offer onchain trades at true forex rates between its two stablecoins, but also any Euro and U.S. Dollar stablecoins.

Forex features will rely on several modules, including the existing Angle Lending AMO and the upcoming forex facilitators of the Protocol.

At launch, the Protocol will create USDA/EURA pairs on Uniswap V3 pools. This will allow users to trade the two stablecoins at their forex value and more generally simplify trades between any EUR and USD stablecoin at secondary market prices.

As shown below, EURA and USDA will operate as independent stablecoins with separate balance sheets. This segregation of assets aims to mitigate risk by confining any potential negative impacts within each stablecoin, thereby safeguarding the stability of each one from being affected by any potential issues with the other.

Although independent, the Protocol will leverage the over-collateralized balance sheets of both USDA and EURA to enable trades between both stablecoins at forex rates.

Angle Protocol will use sophisticated market-making solutions to maintain neutrality, only accepting trades that are statistically profitable and generating revenue from these activities.

As previously announced, the liquidity of USDA will be the same as USDC, while EURA (Angle’s Euro stablecoin) is already as liquid as EURC. By extension, any EURC/USDC trade will occur at forex values.

While on-chain forex markets are currently scattered and often lag behind actual market prices, with liquidity being low, Angle Protocol aims not only to enhance available liquidity but also to improve execution prices for any trade between EUR and USD stablecoins!

Understanding how these modules work is one thing, but how users can interact with them is another. So what will the user experience look like?

The good news is that users won't have to worry about these modules, as everything will happen behind the scenes! Interacting with them will often be imperceptible.

A user trading USD for EUR stablecoins, or vice versa, may not even realize that their trade will be routed through Angle's forex facility. With 1inch and Odos integrating the Angle Transmuter, what might seem like a simple swap on their app could actually involve minting USDA using the Angle Transmuter. For instance, For example, on 1inch, a user trading from USDC to EURC may use the following routing: USDC > USDA > EURA > EURC, without even noticing it.

The Angle app interface will integrate most modules allowing people to get and use USDA, but many modules will also be integrated into interfaces of other protocols.

Thanks to the Angle Lending AMOs, users will be able to borrow USDA on others DeFi protocols. These USDA will be directly minted in the lending pools of these protocols.

The ultimate source of truth for tracking activities across all modules, ensuring system integrity, and monitoring assets and liabilities of the Protocol in real-time will be the Angle Analytics page.

USDA will be seeded with $3M equity coming from EURA’s over-collateralized backing. The equity to liability ratio will from scratch be greater than any of the stablecoins in circulation.

Leveraging 3 years of EURA development, USDA's unique design and innovative mechanisms will provide a complete experience, offering more features, resilience, transparency, efficiency, liquidity, and earnings than any other stablecoin on the market. More than a stablecoin, USDA will become the new DeFi Superconductor streamlining your onchain experience.

Stay tuned for more updates & news before USDA launch!

A few days ago, we introduced USDA, Angle’s upcoming USD stablecoin.

If it’s the first time you've heard of USDA, know that USDA will be the most complete & reliable yield-bearing USD stablecoin. It will offer a savings solution, the same liquidity as USDC, cross-chain availability, borrowing & leverage features and advanced anti-depeg mechanisms. With USDA, and EURA (formerly agEUR), Angle Protocol will lead the charge in creating the most robust and streamlined onchain foreign exchange (forex) hub.

But how will USDA work concretely? What are the mechanisms behind the stablecoin?

Here is everything you need to know.

USDA is going to be a composable piece of infrastructure relying on different modules through which the stablecoin can be minted.

veANGLE holders will play a central role in USDA composability. They will vote, govern and parametrize. Any new minting module — which allows the creation of additional USDA — could be added, revoked, amended and updated at any time through onchain governance votes. All changes will be fully transparent. Before any update, there will be a 24-hour timelock allowing stakeholders to anticipate any decisions they may not agree with.

Each module will have its own trade-offs, unique features, and risks. The Angle DAO will be advised by an independent Asset Liability Management Committee responsible for ensuring sound risk management and an approach to handle all these modules, how users interact with each other, and the management of every module.

Now, let's break down the different modules.

The Transmuter is the most important component of the USDA infrastructure, serving as a Price Stability Module. It will empower users to effortlessly swap a whitelisted collateral asset for the stablecoin at its oracle value, with no fees. Conversely, it will allow for the redemption or burning of USDA in exchange for one or all of the collateral assets in the backing.

Thanks to the Transmuter, users will be able to seamlessly mint and burn USDA from USDC without incurring any fees or experiencing slippage. The system will automatically monitor its exposures to the assets held in reserves. Advanced rebalancing mechanisms will ensure that Angle Protocol avoids overexposure to any single asset, while also incentivizing market makers to restore reserves to their target exposures.

As part of this mechanism, Angle will integrate tokenized securities, T-bills and DeFi yield-bearing assets into the backing, allowing the Protocol to generate yield on its reserves.

Thanks to the Transmuter, users will be able to seamlessly mint and burn USDA from USDC without incurring any fees or experiencing slippage. The system will automatically monitor its exposures to the assets held in reserves. Advanced rebalancing mechanisms will ensure that Angle Protocol avoids overexposure to any single asset, while also incentivizing market makers to restore reserves to their target exposures.

As part of this mechanism, Angle will integrate tokenized securities, T-bills and DeFi yield-bearing assets into the backing, allowing the Protocol to generate yield on its reserves.

The Transmuter mechanism was designed following the USDC depeg incident in March 2023. It comes with robust anti-depeg features, ensuring that Angle stakeholders will be better off during a black swan event compared to any other similar stablecoin protocol.

Why do we call this Transmuter a Price Stability Module?

This is because arbitrageurs can leverage deviations of USDA prices from the peg on the secondary market to earn a profit.

The Angle Lending AMO (Algorithmic Market Operations) and the Borrowing module are two different systems with the same functions: borrow stablecoins.

In the Lending AMO, Angle will lend pre-minted USDA in dedicated lending protocols such as Euler. In the Borrowing module, the Protocol will open credit lines to users, allowing them to borrow the stablecoin against whitelisted collateral assets.

These systems will enable people to get USDA loans with stable or low volatility interest rates, and then leverage this borrowed capital to reinvest and increase their exposure to yield bearing assets like Liquid Restaking Tokens (LRTs).

On top of these systems, the Protocol will offer USDA flash loans. Users will be able to borrow USDA for free and pay back tokens in a single transaction.

The Protocol will earn a yield through the Transmuter and the Borrowing systems. Part of those earnings generated by the Protocol will be directed towards a native Dollar Savings solution.

For instance, if the Protocol has $100 in assets backing 100 USDA stablecoins, and it earns a 5% interest rate on those reserves, it can then mint 5 additional USDA tokens annually. These additional USDA will be automatically allocated to users who participate in Angle Savings solution called stUSD.

This automatic allocation is made possible by the minting rights embedded in the contract.

The Protocol will retain a portion of the yield generated by the assets in reserves to safeguard USDA holders in case of black swan events and to build up a surplus for veANGLE holders.

USDA's standout feature is its upcoming forex capabilities. With USDA and EURA, Angle will be able to offer onchain trades at true forex rates between its two stablecoins, but also any Euro and U.S. Dollar stablecoins.

Forex features will rely on several modules, including the existing Angle Lending AMO and the upcoming forex facilitators of the Protocol.

At launch, the Protocol will create USDA/EURA pairs on Uniswap V3 pools. This will allow users to trade the two stablecoins at their forex value and more generally simplify trades between any EUR and USD stablecoin at secondary market prices.

As shown below, EURA and USDA will operate as independent stablecoins with separate balance sheets. This segregation of assets aims to mitigate risk by confining any potential negative impacts within each stablecoin, thereby safeguarding the stability of each one from being affected by any potential issues with the other.

Although independent, the Protocol will leverage the over-collateralized balance sheets of both USDA and EURA to enable trades between both stablecoins at forex rates.

Angle Protocol will use sophisticated market-making solutions to maintain neutrality, only accepting trades that are statistically profitable and generating revenue from these activities.

As previously announced, the liquidity of USDA will be the same as USDC, while EURA (Angle’s Euro stablecoin) is already as liquid as EURC. By extension, any EURC/USDC trade will occur at forex values.

While on-chain forex markets are currently scattered and often lag behind actual market prices, with liquidity being low, Angle Protocol aims not only to enhance available liquidity but also to improve execution prices for any trade between EUR and USD stablecoins!

Understanding how these modules work is one thing, but how users can interact with them is another. So what will the user experience look like?

The good news is that users won't have to worry about these modules, as everything will happen behind the scenes! Interacting with them will often be imperceptible.

A user trading USD for EUR stablecoins, or vice versa, may not even realize that their trade will be routed through Angle's forex facility. With 1inch and Odos integrating the Angle Transmuter, what might seem like a simple swap on their app could actually involve minting USDA using the Angle Transmuter. For instance, For example, on 1inch, a user trading from USDC to EURC may use the following routing: USDC > USDA > EURA > EURC, without even noticing it.

The Angle app interface will integrate most modules allowing people to get and use USDA, but many modules will also be integrated into interfaces of other protocols.

Thanks to the Angle Lending AMOs, users will be able to borrow USDA on others DeFi protocols. These USDA will be directly minted in the lending pools of these protocols.

The ultimate source of truth for tracking activities across all modules, ensuring system integrity, and monitoring assets and liabilities of the Protocol in real-time will be the Angle Analytics page.

USDA will be seeded with $3M equity coming from EURA’s over-collateralized backing. The equity to liability ratio will from scratch be greater than any of the stablecoins in circulation.

Leveraging 3 years of EURA development, USDA's unique design and innovative mechanisms will provide a complete experience, offering more features, resilience, transparency, efficiency, liquidity, and earnings than any other stablecoin on the market. More than a stablecoin, USDA will become the new DeFi Superconductor streamlining your onchain experience.

Stay tuned for more updates & news before USDA launch!