This FAQ covers everything you need to know about USDFC, from basic concepts to advanced operations and troubleshooting. Whether you're new to stablecoins or looking for specific technical details, you'll find comprehensive answers here.
What You'll Learn
How USDFC stablecoin works and its key features
Step-by-step processes for minting, managing, and redeeming USDFC
Risk management and liquidation mechanics
Advanced topics like Recovery Mode and edge cases
Stability Pool participation and rewards
Quick Navigation
Getting Started
What is Secured Finance?
Secured Finance is a decentralized finance platform that facilitates peer-to-contract lending and derivatives trading. Built on multiple blockchains including Ethereum, Arbitrum, and Filecoin, it offers a transparent, robust, and cost-effective alternative to traditional financial institutions.
The platform consists of two main products:
Fixed-Rate Lending Protocol: Enables fixed-rate, fixed-term lending and borrowing through zero-coupon bonds
USDFC Stablecoin: A dollar-pegged stablecoin backed by Filecoin collateral
What is USDFC?
USDFC is a decentralized stablecoin pegged to the US Dollar and backed by Filecoin (FIL) collateral. It's designed to maintain its value at $1 USD through over-collateralization and various stability mechanisms.
Key features:
Decentralized: No central authority controls USDFC
Over-collateralized: Backed by at least 110% FIL collateral
Redeemable: Exchange USDFC for underlying FIL anytime
Yield-generating: Earn rewards through Stability Pool participation
How does USDFC maintain its peg to the US Dollar?
USDFC maintains its $1 peg through multiple mechanisms:
The minimum collateral ratio for USDFC is 110%. This means you need at least $110 worth of FIL to mint $100 USDFC.
Key points:
Below 110% = liquidation risk
Recommended: 150%+ for safety
Increases to 150% during Recovery Mode
What fees are involved in minting USDFC?
When minting USDFC, you pay:
One-time fees:
Borrowing Fee: 0.5% base fee (may vary with market conditions)
Liquidation Reserve: 20 USDFC (refunded when Trove is closed)
Gas Fees: Network transaction fees in FIL
No ongoing fees:
No interest payments
No maintenance fees
No time-based charges
Example: Minting 1,000 USDFC costs 5 USDFC borrowing fee plus 20 USDFC liquidation reserve plus gas.
Can I mint more USDFC from an existing Trove?
Yes, you can mint additional USDFC from an existing Trove if:
Collateral ratio remains above 110% after minting
You pay the borrowing fee on additional USDFC
Sufficient FIL collateral supports the new total debt
Process:
Access your existing Trove
Calculate new collateral ratio
Mint additional USDFC
Pay borrowing fee on new amount only
What happens if I want to close my Trove?
To close your Trove:
Repay all USDFC debt including any fees
Confirm closure transaction
Receive all FIL collateral back to your wallet
Pay gas fees for the transaction
Requirements:
Must repay 100% of USDFC debt
Cannot partially close a Trove
Trove is permanently removed after closure
20 USDFC liquidation reserve is refunded upon closure
Risk Management
What is the Stability Pool?
The Stability Pool is a pool of USDFC tokens that acts as a buffer to absorb debt from liquidated Troves. It provides system stability and rewards for participants.
How it works:
Users deposit USDFC into the pool
Liquidated debt is paid using pool funds
Liquidated FIL collateral is distributed to depositors
Depositors typically profit from liquidation premiums
How do liquidations work?
When a Trove's collateral ratio falls below 110%:
Liquidation trigger: Anyone can initiate liquidation
Debt payment: Stability Pool USDFC pays off the debt
Collateral distribution: FIL collateral goes to Stability Pool depositors
Liquidator reward: Liquidator receives gas compensation (20 USDFC) and 0.5% of collateral
Example:
Trove has 100 FIL ($400) and 380 USDFC debt
Collateral ratio = 105% (below 110%)
Liquidation occurs, Stability Pool receives ~$400 FIL for $380 debt
What are the benefits of depositing in the Stability Pool?
Stability Pool depositors receive:
Rewards:
FIL from liquidations: Typically profitable due to 110%+ collateral
Liquidation premiums: Receive more value than USDFC deposited
System rewards: Potential additional token rewards
Example profit:
Deposit 1,000 USDFC
Liquidation occurs, receive 1,100 USDFC worth of FIL
Net profit: 100 USDFC equivalent
What are the risks of the Stability Pool?
Risks include:
USDFC reduction: Your deposit decreases during liquidations
FIL price volatility: Received FIL may fluctuate in value
Opportunity cost: Might miss FIL price appreciation
