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USDA Overview

What is $USDA?

$USDA is an over-collateralized debt token issued by Agilely Protocol. USDA can be minted by depositing collateral on Agilely Protocol.

Hard price ceiling

USDA's Vaults' maximum LTV of 90% with WETH as a collateral creates a natural price ceiling at $1.10. When the exchange rate of USDA exceeds this level, borrowers can capitalize on an arbitrage opportunity. They can borrow the maximum amount against their collateral and sell USDA on the market for a price higher than its ceiling value. This dynamic creates an incentive for borrowers and helps maintain price stability.

Hard price floor

USDA has a hard price floor, ensuring that the token's value does not fall below a certain level. Users can redeem 1 USDA for $0.995 worth of collateral (a redemption fee of 0.5% is charged), creating a direct "hard peg mechanism." This mechanism enables users to benefit from arbitrage opportunities when the price of USDA falls below its floor value, helping to prevent consistent over-pegging and promoting a more sustainable implementation of USDA.