Reserves Backing Assets

DUSD Reserves

DUSD is a USD-pegged tokenized dollar that is fully collateralized by a diversified basket of fiat currencies, government bonds, digital assets, and associated short derivative positions to hedge price exposure to volatile sources of collateral assets. This diversified approach enables Delta's ecosystem to benefit from various asset classes with different levels of risk and returns.

Delta Money adopts strict Risk Management practices, designed to support the stability of DUSD while aligning incentives and stimulating the growth of the Delta ecosystem. Collateral assets are selected with a rigid due diligence process, with the objective to mitigate default and counterparty risks. Delta's approach, supported by a highly experienced team, offers tier 1 security levels for the ecosystem.

Initial Collateral Allocations

The initial collateral allocations of Delta Money are diversified across various asset classes, with the goal to provide users with diversification benefits, uncorrelated types of yield, and minimize risks across the ecosystem. In this section, we briefly explore how Delta Money allocates reserves across fiat, crypto assets, and stablecoins.

Digital Assets

Digital Asset Reserve Holdings

Digital Asset Reserves

DUSD is backed by blockchain-native crypto assets, including BTC, ETH, BNB, and SOL. These assets are held in the Reserve Fund (custodied with Copper, Ceffu, and Fireblocks) and the Insurance Fund (custodied with Ledger). To mitigate volatility risk associated with these assets, Delta Money hedges long exposure by shorting perpetual contracts on leading centralized and decentralized exchanges such as Binance, Bybit, OKX, Deribit, Hyperliquid, Apex, and dYdX.

Ecosystem Diversification

Delta Money maintains a collateral-agnostic approach, focusing on assets that promote stability, liquidity, and yield optimization for users. Current crypto exposure is strategically allocated to ecosystems that Delta Money’s governance believes will play a pivotal role in the long-term growth of the crypto economy. Asset whitelisting and allocation sizes are continuously adjusted in response to market dynamics and emerging narratives.

Dynamic Delta Hedging

Delta Money dynamically hedges its long exposure to ETH, BTC, BNB, and SOL by adjusting its delta positioning to promote price stability while maximizing revenue generation across the ecosystem.

In market conditions where there is a stronger incentive to hold volatile assets in spot, Delta Money may opt to retain partial upside exposure by maintaining a net-long position — where the long exposure in spot exceeds the short exposure via perpetual contracts. This approach reflects medium-to-long-term conviction in the value of the underlying assets, and also allows for the potential to capitalize on short-term volatility.

Conversely, in environments where there is limited incentive to hold assets in spot, Delta Money may shift to a fully delta-neutral strategy, balancing long and short positions to eliminate price exposure. In this setup, the protocol focuses on earning funding yields while avoiding any participation in the upside or downside of the underlying crypto assets.

The exposure is carefully calibrated to ensure that any potential losses are fully covered by the Insurance Fund, meaning DUSD holders are never at risk. Furthermore, any gains from upward price movements are deposited into the Insurance Fund as a capital buffer, enhancing the overall safety and resilience of the Delta Money protocol.

Stablecoins

Stablecoin Reserve Holdings

Stablecoin Reserves

DUSD is also backed by a diversified basket of stablecoins, including both fiat-backed and yield-bearing assets. Currently whitelisted stablecoins include USDT, USDC, sUSDS, and USTB. This diversified exposure enhances Delta Money’s liquidity, supports peg stability, and enables the generation of yield from both crypto-native and traditional fixed-income sources.

Dynamic Allocation

Risk-On Mode

When the yield from holding stable, yield-bearing assets (e.g. those linked to U.S. Treasury yields) is relatively low compared to the returns generated from basis trading — that is, going long spot and short perpetuals on volatile crypto assets — Delta Money enters a Risk-On Mode. In this state, the protocol dynamically reallocates a portion of stablecoin collateral into volatile assets such as BTC, ETH, BNB, and SOL, while simultaneously shorting the corresponding perpetual contracts on exchanges. This strategy enables Delta Money to earn positive funding rates and maximize returns during favorable market conditions.

Risk-Off Mode

In contrast, during periods where funding rates are negative or marginally positive, and the relative incentive to perform the basis trade is low, Delta Money adopts a more risk averse stance (Risk-Off Mode). Under this strategy, the protocol reallocates capital toward yield-bearing stablecoins, which provide consistent returns via U.S. Treasury–linked yields. This approach prioritizes capital preservation, peg stability, and overall system safety, especially during downtrending or volatile market conditions.

Fiat

Fiat Reserve Holdings

Fiat Reserves

DUSD is a stablecoin backed by a diversified pool of highly liquid fiat reserves, securely held at leading global financial institutions for the benefit of its holders. The reserve portfolio includes Treasury Bills, overnight reverse repos, cash, and bank deposits. This carefully engineered reserve structure is designed to maximize stability, liquidity, and the resilience of DUSD in all market conditions.

Geographic Diversification

Delta Money maintains a geographically diversified exposure to sovereign risk, intentionally reducing concentration in the U.S. and expanding into emerging markets. This strategy allows the system to contribute to the financial development of these economies while delivering enhanced returns to DUSD holders through exposure to higher-yielding assets, including both USD-denominated and locally denominated instruments in emerging markets.

To manage currency exposure, a delta-neutral position is maintained by actively hedging exchange rate risk against the U.S. dollar through forward contracts with reputable local banks.

Delta Money operates in collaboration with local governments and financial institutions in several emerging economies, including Brazil, Argentina, and Kazakhstan, where a tailored approach is taken to support both regional needs and macroeconomic growth in each country.

Monthly Transparency Reports

In line with Delta's commitment to transparency, monthly attestation reports are published covering all reserve assets, beginning from DUSD’s inception. These reports are conducted in accordance with standards set by the International Auditing and Assurance Standards Board (IAASB) for reasonable assurance engagements.

The engagement is designed to provide a high level of assurance that the reserve data is free from material misstatement, and is limited solely to the verification of total assets and liabilities as of the reporting date. Detailed methodologies and procedures are fully disclosed within each report.