Stability

Stability Architecture of DUSD

Robust 1:1 Collateralization with High-Quality Assets

At the core of DUSD’s stability lies a strict 1:1 collateralization model, backed by a diversified basket of high-quality assets. These include fiat currencies, short-dated government bonds, and blockchain-native assets such as ETH, BTC, BNB, and SOL. Every DUSD issued is fully supported by an equivalent reserve value, ensuring transparency, trust, and a strong foundation for long-term stability.

Delta Hedging Across Asset Classes

Delta Money implements an adaptive delta hedging framework designed to manage and optimize risk exposure across a broad range of volatile assets. This includes digital assets such as ETH, BTC, BNB, and SOL, as well as non-USD fiat currencies like the Brazilian Real (BRL) and Kazakhstani Tenge (KZT).

Rather than strictly neutralizing exposure, the strategy allows for dynamic positioning — ranging from fully hedged to modestly net-long — based on prevailing market conditions, funding dynamics, and macroeconomic signals.

Through carefully structured derivative instruments — including forwards, options, and futures — Delta can hedge downside risks while retaining upside potential where appropriate. This strategic flexibility ensures that currency and market volatility are actively managed without compromising the peg stability of DUSD. The result is a robust, risk-aware approach that meets institutional standards while supporting long-term capital efficiency and ecosystem growth.

Arbitrage-Driven Peg Reinforcement

When the market price of DUSD deviates from its $1 target, arbitrageurs play a critical role in restoring price equilibrium. Authorized participants are incentivized to exploit these deviations by purchasing undervalued DUSD or selling it when overvalued, generating natural market forces that pull the price back toward parity.

This arbitrage loop ensures that peg discrepancies are swiftly resolved, reinforcing DUSD’s reliability in secondary markets.

Capital Buffers and Insurance Fund Protection

To provide additional systemic resilience, Delta Money maintains a fully capitalized Insurance Fund that serves as a backstop against funding losses or market dislocations. A minimum buffer of 120% relative to net delta exposure is continuously upheld.

This fund is designed to absorb negative funding scenarios, covering operational and market risks without impacting the underlying value of DUSD. It ensures uninterrupted redemptions and supports confidence during periods of stress.