Fiat
Fiat Backing Assets
Last updated
Fiat Backing Assets
Last updated
DUSD's collateral base consists of short-term U.S. and non-U.S. Treasuries, repurchase agreements, and cash, all held and custodied with top-tier global financial institutions. Delta Money's fiat collateral strategy is designed to reinforce DUSD’s stability, optimize yield generation on reserves, preserve liquidity, and ensure a low-risk profile for holders across all tiers of investment.
The collateral allocation is diversified, with approximately 80% allocated to short-dated U.S. and non-U.S. Treasuries, and 20% in cash and other highly liquid instruments. Additionally, Delta Money accepts fiat from emerging market economies, with exchange rate risk against the USD mitigated through derivative instruments structured by reputable financial institutions. This approach facilitates a scalable platform while enabling targeted exposure to high-yield government bonds and repo markets in emerging economies.
Delta Money employs a strategically diversified approach to managing exposure to emerging market currencies, including the Kazakhstani Tenge (KZT) and Brazilian Real (BRL), within its comprehensive collateral management framework. To mitigate exchange rate risk relative to the U.S. Dollar for locally denominated bonds, Delta Money implements hedging strategies through forward contracts, futures, and options, all aligned with the maturity profiles of the corresponding local bonds.
Exchange rate risk is effectively hedged at the time of DUSD minting, utilizing the most current and accurate market data to ensure optimal precision and risk control. The yield generated from these emerging market assets is systematically allocated to clients through Delta Institutional, providing a high level of security, transparency, and reliable yields.
Delta Money’s exposure to emerging markets is fully aligned with user objectives, combining high-yield opportunities with a disciplined approach to risk management and capital preservation. Additionally, the protocol retains the flexibility to purchase emerging market bonds denominated in USD—a strategy that requires no currency hedging while still contributing to yield enhancement.
Delta Money’s exposure to the U.S. market is managed through the strategic allocation of dollar proceeds from minting DUSD, which are invested in short-dated U.S. Treasury bonds and the repo market. These low-risk, liquid instruments are selected to ensure both stability and liquidity, while also generating consistent revenue.
This approach allows Delta Money to efficiently manage U.S. dollar exposure, ensuring that funds remain both secure and highly liquid. The yield generated from these investments is allocated to institutional clients, further supporting the ecosystem. Delta Money’s U.S. market strategy is carefully crafted to align with its broader goals of capital preservation and risk management, while optimizing yield opportunities within a well-structured framework.
