Underlying Tokenized RWA is always pegged 1:1 to US Dollar
For underlying Tokenized RWA (here, STBT) to maintain 1:1 peg with US Dollar, its total supply is adjusted to the Net Asset Value (NAV) of the underlying portfolio on a daily basis. Yield is then rebased, excluding any negative interest days.
(Rebase is where supply is algorithmically adjusted to peg the price. In our case, this is the minting of new tokens to ensure constant 1:1 peg to US Dollar)
USDV's Vault holding all the tokenized RWA will also receive the rebase yield.
Yield is proportionally shared between Verified Minters based on the circulation attribution calculated by ColorTrace.
Fair, transparent and equitable yield distribution
Countless CeFi, DeFi and businesses across geographies, blockchains and domains will contribute to USDV circulation and its growth.
Logically, players contributing to a greater share of USDV circulation should be eligible to a larger share of the underlying yields.
Given the unpredictable and permissionless nature of stablecoin flow, the difficult question is how can we attribute USDV circulation precisely to each contributor to enable fair yield distribution?
This is enabled by ColorTrace, a novel token coloring algorithm developed by LayerZero Labs, and a core feature supporting the USDV architecture.