# What is USDO?

<figure><img src="https://3719557538-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fqy4lDtL5Jn7c3q9Y987B%2Fuploads%2F7MSlXCuf3JEzVHd7fKqx%2FThumbnail.jpg?alt=media&amp;token=c96ce0d0-564f-4684-95bd-6df43db97fba" alt=""><figcaption></figcaption></figure>

USDO is a special coin that is backed by collateralized stablecoins carefully audited by proven auditing companies.

The collateral comes from:

1. Part of the fees from transactions on [MiaSwap ](https://miaswap.io/)will be converted to a stablecoin and deposited into the collateral to back USDO. This deposit does not put new USDO in circulation.
2. Users deposit collateral at the market rate in order to mint new USDO.

#### **So what makes USDO different from other stablecoins out there?**&#x20;

* USDO is not pegged but backed by collateralized stablecoins that have been selected and audited by proven auditing companies.
* With a unique mechanism, USDO's price can't go lower than its collateralized stablecoins
* Everyone can mint and redeem USDO at any time.
* USDO holds value down to the last holder even when everyone sells out.
* The value of USDO can increase faster after a massive dump.


# Mint & Redeem

USDO can be minted with zero commissions at any time by depositing the approved stablecoins (currently BUSD) at the current rate via the website.&#x20;

Users can redeem the value of their USDO at any time by depositing their USDO into our website/contract and receiving BUSD at the current rate in return. The USDO redeemed from the user will be removed from the circulating.

**Redemptions will have a 0.5% fee attached.**

The fees from the redemption will be used for:

* 0.1% to buy and burn **MIA**
* 0.1% to buy and burn **ONUS**
* 0.3% for the **USDO Collateral** (a smart contract that has collateralized stablecoins with only mint and redeem functions)


# How USDO Increases in Value

Every 24 hours, the value of the USDO is recalculated.

When collateral increases, many stablecoins increase the supply of the stablecoin to maintain the peg or let it be overcollateralized. And when collateral decreases, many stablecoins have to lower the supply again to maintain the peg.

**The value of USDO is calculated by taking the total collateral and dividing it by the total circulating supply.**

All transactions on MiaSwap that generates AMM fees will have 20% of their amount converted to a pre-approved stablecoin and deposited into the USDO collateral. This means that USDO will now be overcollateralized. So, instead of letting it sit there like that, we will rebase the value of USDO at the new rate.

**Let’s use a simple illustration with a low value:**

<figure><img src="https://lh5.googleusercontent.com/o2V5o4uEZXmoC-Q72O1shusrENt4q3WKoEwTVp631KZqBmD1WYTrRBI5m_XQEQt7QzRlLCRXS2stx4jo8v0uLZADbW4f03EACmhZ1bf-sNQmthFoQPsPZ-_qigOFzXyWIbaJjmkKF3K53bW6fI4nkdRE1e3pHqEauovYflWTUTFPIfhnK7EAwcRo" alt=""><figcaption></figcaption></figure>

* Collateral = 1 BUSD
* USDO circulating supply = 1
* The current rate is 1 BUSD per 1 USDO
* Mint: 1 BUSD for 1 USDO
* Redeem: 1 USDO for 1 BUSD

**Now, we add in some fees from our AMM transactions. For example, 2 BUSD worth of fees.**

<figure><img src="https://lh3.googleusercontent.com/0BpWt0qwTFNQGZu6d2HfiushLKjby1YO16Og6kPFxFxZ43IqATKco_qBFXZw-HxchRcWS55DTRD95hj6K_32VGwoqgImVQorOCZBUe8WGnMiFbuax7R3nYGHs_bObnwg1Z7GVzrR6_g1Dh7EoS9RmCf9ZtpQpfa6XpmhFhBZPyrfiXd1Fk8Ela8c" alt=""><figcaption></figcaption></figure>

* Collateral = 3 BUSD
* USDO circulating supply = 1
* The current rate is 3 BUSD per 1 USDO
* Mint: 3 BUSD for 1 USDO
* Redeem: 3 USDO for 1 BUSD

In this sense, USDO is a little better compared to other stablecoins.

* Similar to countries appreciating their currencies when their economy is doing better, the better the ecosystem does, the more USDO can appreciate in value.
* The growth in value is collateralized by audited USD-backed stablecoins and not backed by traditional crypto coins.


# How Selling USDO Promotes Price Growth

Many of us are used to coins’ value going off a cliff when holders massively dump the coins, no one wants to be the last person holding onto a coin that everyone else is selling out of as with each seller, the value of the coin will continue dropping. USDO is built to be different.

### Example 1: No one sells out USDO

#### **Starts off with 4 BUSD and 4 USDO**

<figure><img src="https://lh3.googleusercontent.com/oNQvKWBqN2_l1H66oTf6yMZJJtIIM32ET2zKhjQc1aY_G4sgWC9jMTbQMbTejmQnbXwWrpb6_VQJqbxsw56RlyoBuNTPeyQh4eX_XwyEBo_2STPUi64YBmK4UX5YMlKGSItLOQnEf0pbwWCWNKC4_A3b8GIIH3HC6sPiUCWW2TYDXDmCctuRZbCI" alt=""><figcaption></figcaption></figure>

* Collateral = 4 BUSD
* USDO circulating supply = 4
* The current rate is 1 BUSD per 1 USDO

#### **No one bought or sold any USDO**

<figure><img src="https://lh5.googleusercontent.com/PMNPktDhUXgE9-jF4gvqkV5ITWTgtkRIx6klNocA--3fgMcAC-lfqlKPN-n97e_dtbPKTVPTd8aKdVLwz_FBLq75Y99PEA-hS4Sx1igUtL4ZzOnD2Q46SusC-lzIKxumpUj6ncECPY2eJCoB1RmX8NM4m984nHy23kq0WgLd3DKc4jRsvL316X23" alt=""><figcaption></figcaption></figure>

* Collateral = 4 BUSD
* USDO circulating supply = 4
* The current rate is 1 BUSD per 1 USDO

#### **We add in 4 BUSD from MiaSwap's transaction fees**

<figure><img src="https://lh3.googleusercontent.com/dW1GKzZ8WjOfuRMbvWZZu4NenEc8pEDrV2IIwuKEZLe0ZwfyuL1iwBggkKRtMCgznqNDSRsFagKVsmmCvCmSN2Q0KGrXYWE9UrXKlBjATNJbVJvbNaLlnsS_1iAmTvjRdGsXknX2yoThx_30Iw58du8VdQiPWzLPbS5KGVHuCZzXGcCV4aLIBfkl" alt=""><figcaption></figcaption></figure>

* Collateral = 8 BUSD
* USDO circulating supply = 4
* The current rate is 2 BUSD per 1 USDO

### Example 2: A user sells out 75% of the total supply

#### **Starts off with 4 BUSD and 4 USDO**

<figure><img src="https://lh3.googleusercontent.com/CX1Ex1e-eHX3Nmgn5Nd7RX246KSn-MHPJ9UGQAFXYV7WibsJm4pVN_VnTUP91G1I5Z0v2J9UDxxooFb9D5g7CcZ6iH1WAe9QulEGG0XqR9sVPklKeZkNHLpVOGD199uivI8K8hBfPrssjgG-GaTSHhq7yDHQ4BKBb9bWOuxI4mt279e2Ut-Paqit" alt=""><figcaption></figcaption></figure>

* Collateral = 4 BUSD
* USDO circulating supply = 4
* The current rate is 1 BUSD per 1 USDO

#### **A user now sells out 75% of the supply, burning 3 USDO and taking out 3 BUSD from the collateral**

<figure><img src="https://lh5.googleusercontent.com/aXIuBdiMdcHDaVDK4yQY4z-kB7Ap4pkh_MOqHJsOr__H7omEz8L1Spe5lt7x1HUPKFCGdEx4kcCoiiZVoWwWneAYdXfYPpK987N4kaJ3nEsm_LjOC9xEtaeF_I6Jao_5EtsbaFlD6inoKz5RzTZNqjSAWXbl4UupDSw7LTdLQBvdkuuovPbFKelH" alt=""><figcaption></figcaption></figure>

* Collateral = 1 BUSD
* USDO circulating supply = 1
* The current rate is 1 BUSD per 1 USDO

As we can see, there’s no change in the value of USDO.

#### **We add in 4 BUSD from our MiaSwap's transaction fees same as example 1**

<figure><img src="https://lh5.googleusercontent.com/ny5uj1qkLLgnxxGRm8PRgTAJ7a4wjFWV2nO2nFPc3kELAhqZ-e2qdHHDa9aaxB8zE5U9YQvdDsKLmh0zRtjbI2M6iFPPpaVuclAx1Ce1tlYPZd0srxFPQUxdRS2TqTX3MpdGNypnGscGZpx8rATdDdYJuVf-k6TpMagTr5W9AIRCmr2RxuIxU6YQ" alt=""><figcaption></figcaption></figure>

* Collateral = 5 BUSD
* USDO circulating supply = 1
* The current rate is 5 BUSD per 1 USDO

Due to the lowered circulating supply, each BUSD added to the collateral gives the remaining USDO more value.

### Comparison

<figure><img src="https://lh4.googleusercontent.com/VHmYzVMu7Skiu9ALcu3H3-r_-0Az5OGkt82ZpG0IepxfMJEv6yZltaoNbDyu7Euy7XplMivFBSrJ_kgnzbHf_RwVcFqXbfMT_m7VupliTQ1rJXd6Sg3-BuTfRcMIbAYQqwrgN3m8TH_jkM5Xy8oELqWCuglvjNnEomM-ZfaUrZNn4yeRIfj7Rypp" alt=""><figcaption></figcaption></figure>

In this sense, USDO is a little better compared to other normal cryptocurrencies.&#x20;

* The more users sell out USDO, the more valuable each remaining USDO becomes.
* The value of USDO can be maintained right down to the last holder.


# Usages of USDO

**Retail Investors**

USDO gives ONUS Chain users a way to store their profits without moving the funds out of the chain. Because it is backed by BUSD and other stablecoins that don't appreciate in value, USDO grants everyone a choice of storing their profits:

* In a coin that stays at $1 OR&#x20;
* Storing in a coin that can possibly appreciate in value, where the value is still backed by the coins that stay at $1.

### P2E NFT Games

All P2E projects can buy USDO when the game first starts and rewards players with the same USDO but at a possibly higher value in the future.

The more successful the game is, the more transactions there will be, and in turn, the more valuable the rewards are. All this without increasing the cost of the project for the game operators.

### Blockchain Businesses

These businesses can charge in USD value and accept USDO.

* This reduces their risk of selecting a volatile coin to accept for payment.
* Their revenue can grow in value steadily as more customers and other businesses use USDO.


# Drawbacks of USDO

Of course, while there are pros to this model, there are drawbacks as well.

### Large Numbers

It’s easy for the coin to grow in value when it starts off at lower collateral. But it would be very difficult to increase the value of the coin when both the collateral and circulating supply are 8, 9, or even 10 figures. As the amount of collateral required to increase the value per coin would be much, much larger.

Hence we never promise any expected growth rate for USDO; as such, no one should be investing in this coin expecting any growth.

### Collateral Risk

The value is 100% dependent on the chosen collateral. For example, if we choose to keep all the collateral in BUSD, and if BUSD suddenly de-pegs, USDO's value would also drop.

To hedge against this risk, the USDO collateral will be diversified into multiple audited stablecoins, multiple currencies, and even collateralized gold as the collateral grows in size.

Once the collateral grows enough, it’s possible we may have to migrate to version 2.0 of the contract to allow the withdrawal of the collateral and deposit it off-chain held by an independent custodial trust to then allocate assets into AAA government bonds.

### Geopolitical Risk

In line with collateral risk, while we are starting off with a US Dollar base, this works great when US Dollar is the global currency. Should another global power rise up and have a CBDC (Central Bank Digital Currency), we could ideally diversify and possibly reallocate part of our collateral into that.

Possible safe haven currencies are typical:

* CHF (Swiss Franc)
* SGD (Singapore Dollars)

Most major currencies typically face higher inflation rates or lesser economic stability to back their currency.

### Hacking Risk

With a growing amount of collateral, it will definitely draw eyes on USDO, we should expect hackers to attempt to steal the collateral at all times.

To hedge against this risk, USDO's contract has been pen-tested multiple times from multiple vectors. To protect against internal hacking, no single party should be able to reallocate the collateral into another token, even multi-sig wallets, as we can see from the Axies hack.


# Why USDO?

It’s really hard to find a crypto that has the stability of a stablecoin and is possible to appreciate in value over time like a normal token.

USDO is only available on ONUS Chain; as such users who want to buy or withdraw the value in USDO must be on-chain.

Not everyone will have BUSD when buying USDO and will likely use MiaSwap to swap to BUSD before minting into USDO, similarly not everyone will want to redeem their USDO to BUSD and will likely swap to their coin of choice. All these meant additional transaction volume for MiaSwap and in turn more benefits for USDO.

Redeeming generates fees to buy back and burn MIA and ONUS and increases the collateral for USDO.

Network effects, the more users, partners, and businesses transact on-chain, the more value everyone gains.


# Community

USDO is establishing a strong worldwide community, and our staff is committed to caring for and supporting every member of that community. We keep our community up to date on the latest USDO news and releases, and we encourage constructive, engaged dialogue on all of our social platforms. Here you'll find a list of USDO's official social media channels and communities.

### Twitter

<https://twitter.com/USDOcoin>

### Telegram

Group: <https://t.me/usdo_globalcommunity>

Channel: <https://t.me/usdo_globalchannel>

### Discord

<https://discord.gg/rNcq4VP6Gd>