FAQs
💭 Can I just buy Usd8 and use it for claiming whenever I need it?
No. Usd8 comes with a 30-day cooldown after you receive them. During this period, they cannot be used for claims.
Except if they are from a known Defi yield contract you deposited in, this allows Usd8 owners to yield with Usd8 and still enjoy the protection.
💭 How safe is the Protected Savings vault?
It is one of the safest savings vaults because it comes with an 80% coverage. This means you can always claim up to 80% of your position value from the Cover Pool if something goes wrong.
On top of that, you still earn competitive the yield.
💭 How safe is the Cover Pool?
Assets deposited in the Cover Pool are used to cover hacking losses from Covered Protocols. This makes it riskier than the Protected Savings vault, which is why it offers a higher APY.
Our security experts independently vet and audit every protocol before offering coverage. Claims are not expected to occur often, but there is always a possibility.
💭 So all my positions in Covered DeFi Protocols are protected?
Yes. As long as you hold Usd8, you can lock them to claim for any covered defi positions. Locking Usd8 is optional if the position already involves Usd8 e.g. an Usd8 LTS, AMM LP token of an Usd8 pool.
💭 Do I need to hold Usd8 at all times to enjoy coverage?
No. While holding Usd8 certainly gives you coverage, you can also deposit Usd8 into recognized DeFi protocols for yield. When you need to make a claim, simply withdraw your Usd8 from these protocols. Usd8 coming from recognized DeFi protocols are not subject to the 30-day claim cooldown.
💭 Do I forfeit my covered LP token when claiming from the Cover Pool?
Yes. To claim from the Cover Pool, you must provide:
- A covered LP token
- Lock some Usd8 for 30 days (optional if the LP token is already a Usd8 position)
The covered LP tokens are transferred to Cover Pool liquidity providers.
💭 Will I always get 80% of my money back for a defi protocol with 80% coverage?
Not necessarily. The actual reimbursed amount depends on:
- How many other users are claiming using this LP token and their position sizes
- How much Usd8 each claimant locks
- The balance of the Cover Pool
In practice, the more Usd8 you lock, the higher your claim weight. The max reimbursement amount is 80% your LP value, but it is also possible you might get less than that.
💭 How do you prevent fraudulent claims?
Usd8 only covers up to 80% of any position at max. Unless the LP token’s value drops below 80%, it is not financially rational to file a false claim to the Cover Pool.
💭 How does Usd8 make money?
Like most stablecoins, Usd8 generates revenue from collateral yield.
- A portion of this yield is distributed to Usd8 Savings depositors.
- The remaining yield becomes Usd8’s revenue, which is primarily distributed to Cover Pool depositors.
💭 Who is behind Usd8?
Usd8 was founded by an OpenZeppelin auditor and security researcher with over 5 years of experience, specializing in DeFi protocols and Ethereum Layer-2 solutions.
We are passionate about DeFi security and dedicated to building solutions that make the on-chain environment safer for everyone.