Monetary systems
Stablecoin mechanisms
A collateralized stablecoin is debt. Maker mints it against a vault and charges a stability fee. Sky’s USDS is a one-for-one token on that same debt. A Curve StableSwap pool only trades stablecoins. crvUSD is a third design that liquidates through an AMM.
“Stablecoin” names a target price, not a mechanism. The tokens on this site get to a dollar in different ways, and one of the famous “stablecoin protocols” is not minting one in its main AMM at all.
Debt against collateral
Maker mints DAI by letting a vault draw it against ink. The stablecoin is a liability recorded as art * rate. Repayment burns the liability and frees collateral. The peg is not a line in the Vat. The Vat enforces collateralization. The peg is a market outcome of liquidations, of the stability fee making DAI more or less attractive to mint, and of peg modules that swap DAI or USDS with an external stablecoin at a fixed price while they have inventory.
USDS does not create a second liability ledger. The token routes say it shares issuance with DAI, and the converter is one-for-one. Holding USDS instead of DAI changes the token contract, including its upgrade proxy. It does not, by itself, change the vault that backed the unit.
sUSDS is not a stablecoin in the same sense. It is a share of a savings module. Its USDS value is supposed to rise with the savings rate. Treating sUSDS as “one dollar” double-counts the yield.
- Lock collateralA user posts an asset the protocol is willing to count. The collateral is accounted per position and per collateral type.
- Draw debtThe protocol mints stablecoin debt against that collateral, up to a ceiling and a collateralization rule.
- FeesDebt grows by a governance-set stability fee, or another fee rule. The fee is system revenue, not a market price.
- Repay or liquidateRepaying debt releases collateral. An unsafe position can be liquidated. A peg module can swap the stablecoin with an external asset without touching a vault.
This matches the shape of a vault-based stablecoin such as DAI. It is not a description of a fiat-backed token, and it is not Curve’s StableSwap pool.
A pool is not a mint
Curve StableSwap lets people trade tokens that already exist. The pool does not mint DAI when someone sells USDC into the three-pool. It changes the mix of reserves. If one of those tokens breaks its peg, the invariant will sell it, slowly and then quickly, to anyone who trades. Liquidity providers own the broken token. The AMM was doing what its A parameter told it to do.
That is why a Curve pool can be deep and still not be a guarantee. Amplification is leverage toward the assumption that the coins belong at the same price.
crvUSD
crvUSD is Curve’s minted stablecoin, documented separately from StableSwap. Borrowers post collateral. LLAMMA sells that collateral into the stablecoin as the price falls, which is a liquidation design, not a peg pool. Savings crvUSD takes a portion of borrower interest. A dashboard that labels every Curve contract “the stablecoin pool” will mix LP tokens, controller debt, and scrvUSD shares.
What stability still depends on
A collateralized stablecoin depends on collateral prices, on liquidators or bands actually clearing inventory, and on governance not raising a debt ceiling past what the collateral can carry. A peg module depends on the external stablecoin and on the module’s inventory. A StableSwap pool depends on the issuers of the tokens inside it. None of these is “backed by code” in a way that removes the asset. The security assumptions page keeps that list short on purpose.
Sources
- Vat detailed documentation Documentation · MakerDAO
- Protocol token routes Documentation · Sky
- USDS Documentation · Sky
- Understanding StableSwap Documentation · Curve
- crvUSD overview Documentation · Curve