USDF

Frozen USD (USDF) is an over-collacteralized stablecoin backed by interest bearing assets unique to FrozenBlock Finance. We are innovating in the seignorage protocol space and creating new features that have yet to be introduced. USDF will serve as the native stablecoin of our ecosystem and will continue to be growing protocol in the DeFi industry.

What Does "Over-Collateralized" Mean?

In simple terms, USDF being over collateralized means that for every 1 USDF that is issued, there will be a minimum of $1 USD of assets backing it. Therefore, there will always be an incentive for USDF to hold a minimum value of $1. This is done by setting a maximum Loan-to-Value (LTV) of 95%. This means that for every $1 deposited into our protocol, a maximum of $0.95 can be loaned in USDF. The idea of setting the LTV<100% is to ensure that there will always be more value backing USDF than actual USDF in supply, making it a true reserve currency.

What Assets Are Backing USDF?

Initially, USDF will be backed by interest-bearing assets. This means that the only tokens that can be used to deposit and loan USDF will be tokens that continuously earn interest. For example, right now the sAVAX token from BenQi is an interest-bearing AVAX token that grows by 7.2% annually just by holding the token. Therefore, USDF will be backed by assets that earn interest. The best part is the majority of this interest can be passed back to the depositor, so that they continue to earn interest while they borrow USDF.

Is There Interest on My USDF Loan?

No, USDF is an interest free loan.

How Does FrozenBlock Make Money if There is No Interest?

We earn money through two main components of the USDF protocol. The first is a deposit fee which is taken whenever someone deposits their yield bearing tokens to borrow USDF. This fee will be very small, in the range of 0.1%-1% depending on the token deposited. The second way FrozenBlock earns through USDF is by keeping a small portion of the interest earned on the deposited tokens. For example, if sAVAX earns 7.2%, then roughly 75% of the interest earned will be passed back to the depositor, and FrozenBlock will keep 25% in in their reserves as revenue. Remember that this is only 25% of the interest earned, not 25% of the total deposit value.

More details on USDF tokenomics will be coming soon!