Universal Dollar is a fully decentralized DeFi compatible algorithmic stablecoin. U8D is also a governance token for Universal Dollar DAO.
Existing algorithmic stablecoin projects have gained incredible traction and see high trading volumes and liquidity. They’ve been regarded as exciting instruments for speculation, arbitrage, and trading. But at the end of the day, they do not fulfil the purpose of being stable units of value. We need an algorithmic stablecoin that can get out of initial bootstrap volatility as fast as possible and provide a smooth expansion and contraction phase towards a stable zone. Based on the ESD success we are creating a new algorithmic superfluid stablecoin, Universal Dollar (U8D), with better capital flow by adding several unique components.
Similar to ESD (and by proxy, DSD), U8D has elastic supply and moves between expansion and contraction periods.
Expansion: When TWAP > 1 USDC, the protocol prints additional U8Ds which distribute between DAO and LP participants to incentivize them to sell and bring the price to the peg.
Contraction: When TWAP < 1 USDC, the protocol issues debt which can be converted to coupons by burning U8Ds with a premium determined by supply/debt ratio. Coupons can be redeemed back to U8D 1:1 when TWAP returns to the peg. By burning U8D for coupons, participants are helping the price return to the peg.
