How USS and eUSS Work

USS and eUSS are synthetic dollar tokens backed by delta-neutral positions on Solana

USS and enhancedUSS (eUSS) aim to be stable, onchain, and yield-bearing synthetic dollar. Both tokens are backed by delta-neutral positions on DEX:

• Both USS and eUSS are backed by staked Solana

• The difference between the two is that USS's staked collateral is hedged 1:1 by spot Solana positions. eUSS's staked collateral is hedged 1:1 by perpetual contracts. This allows eUSS to earn more yield in the long term, but the token value is also more volatile.

• Setora Labs does not use any material leverage to margin the delta hedging positions with either USS or eUSS.

Flow of Fund

• Whitelisted accounts from eligible jurisdictions can mint and redeem USS and eUSS on-demand directly with Setora Labs contract.

• The system does not rely on traditional banking infrastructure, as trustless collateral is held and stored 100% on chain.

Explanation

• Whitelisted users provide ~$100,000 USDC and receive ~100,000 USS/eUSS.

• Slippage and execution fees are factored into the price during the minting and redeeming process. Setora Labs does not earn any profit from the minting or redeeming of USS/eUSS.

• The protocol converts $100,000 USDC collateral into SOL tokens.

• The protocol stakes these SOL with staking platform and receives liquid staking tokens in return.

• Liquid staking tokens are deposited on decentralized exchanges as collateral to initiate delta-neutral hedge.

• When users redeem USS/eUSS, the flow reverses.