Solution: USDe

A crypto-native synthetic dollar utilizing spot assets as backing, onchain custody, and centralized liquidity venues

A delta-neutral synthetic dollar that is backed by assets outside the banking system and that can access centralized liquidity addresses the challenges of existing stablecoin designs.

USDe is enabled via hedging the delta of spot assets backing the token during minting. As a result, USDe provides the following benefits:

i) Scalability is achieved by utilizing derivatives which allows for USDe to scale with capital efficiency. Since the backing assets can be perfectly hedged with a short position of equivalent notional, the synthetic dollar only requires 1:1 "collateralization."

ii) Stability is supported through hedges executed against the transferred assets immediately on issuance that buttresses the synthetic USD value of USDe backing.

iii) Censorship Resistance by separating backing from the banking system and storing trustless backing assets outside of centralized liquidity venues in onchain, transparent, 24/7 auditable, programmatic custody account solutions.

Utilizing recent developments in "off-exchange" MPC secured (and similar) custody accounts to access centralized liquidity, while retaining the core value proposition of transparency and onchain custody, USDe can scale into the billions as the crypto-native dollar for both the decentralized and centralized crypto-ecosystems. As the mechanics of forming USDe backing inherently create a protocol-level revenue, the system supports a reward-bearing 'Internet Bond' alongside USDe, sUSDe, that scales with it.

Enabling Ethereum and other digital assets to evolve into a reasonably stable medium of exchange will not only support significant capital inflows into both the centralized & decentralized ecosystems; it will also provide the most important native 'money' asset across crypto markets.