> For the complete documentation index, see [llms.txt](https://docs.secured.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.secured.finance/usdfc-stablecoin/overview.md). # Overview A decentralized, over-collateralized stablecoin backed by FIL
USDFC logo
[**USDFC**](https://app.usdfc.net) is a USD-pegged stablecoin backed entirely by Filecoin (FIL) and running on the Filecoin Virtual Machine (FVM). You lock FIL as collateral in a **Trove**, mint USDFC against it, and repay whenever you like — no counterparty, no credit check, and no ongoing interest. It is the first decentralized stablecoin fully collateralized by FIL. ## How it works in brief * **Open a Trove and mint.** Deposit FIL, choose how much USDFC to borrow, and keep your collateral ratio above the **110% minimum**. A one-time borrowing fee (0.5% or more in Normal Mode; waived in Recovery Mode) is added to your debt; there is no interest. * **Stay collateralized.** If FIL falls and a Trove drops below 110%, it can be liquidated: its debt is repaid from the **Stability Pool** and its collateral goes to the pool's depositors; in some cases (see [Liquidation](/usdfc-stablecoin/core-mechanics/liquidation.md)) debt and collateral are instead redistributed to other Troves. * **Redeem at face value.** Any holder can redeem USDFC for $1 worth of FIL directly from the protocol, minus a small redemption fee, whenever the system's total collateral ratio is at or above 110%. This is what anchors the peg — if USDFC trades far enough below $1 that the discount exceeds the redemption fee and transaction costs, redemption arbitrage pushes it back. * **Recovery Mode.** If the whole system's collateral ratio falls below 150%, stricter rules kick in until it recovers. The mechanics are covered in depth in [Core Mechanics](/usdfc-stablecoin/core-mechanics.md). ## Key parameters | Parameter | Value | | ------------------------------------------------ | ------------------------------------ | | Minimum Collateral Ratio (MCR) | 110% | | Recovery Mode threshold (system-wide) | 150% | | Minimum borrow amount per Trove | 200 USDFC | | Liquidation Reserve (not repaid by you on close) | 20 USDFC | | Borrowing fee (one-time) | 0.5% – 5%, varies with the Base Rate | | Redemption fee | 0.5% + Base Rate, paid in FIL | | Interest | None | ## Putting USDFC to work Once minted, USDFC is the liquidity layer of Secured Finance's products on Filecoin — and usable across the wider ecosystem: | Use | Where | | ---------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | | Earn liquidation gains by backing the protocol | [Stability Pool](/usdfc-stablecoin/getting-started/using-the-stability-pool.md) | | Lend at a fixed rate | [Fixed-Rate Lending](/fixed-rate-lending/overview.md) | | Earn automated, variable yield | [SF Yield Vault — USDFC Vault](/sf-yield-vault/core-mechanics/available-vaults-and-strategies/usdfc-lending-strategy.md) | | Trade or provide liquidity | SushiSwap on Filecoin | | Move to other chains | Bridge (Squid) in the USDFC app | For a side-by-side view of all Secured Finance products, see [Protocol at a Glance](/introduction/protocol-at-a-glance.md). ## Token standards USDFC is an ERC-20 token that also implements **EIP-2612** (`permit`) and **EIP-3009** (`transferWithAuthorization` / `receiveWithAuthorization`). `permit` lets a holder grant a spending allowance with a signature instead of an approval transaction. `transferWithAuthorization` lets a holder sign a transfer that anyone can submit and pay gas for; `receiveWithAuthorization` does the same but must be submitted by the recipient. Together these make USDFC usable in gasless flows and **x402** (HTTP 402) payment flows. The interfaces are in the [`DebtToken` contract](https://github.com/Secured-Finance/stablecoin-contracts/blob/develop/contracts/DebtToken.sol); see [Contracts and Security](/usdfc-stablecoin/deployed-contracts.md#token-standards). ## Why Filecoin FIL is the native asset of the Filecoin network, whose storage economy is growing with AI-era data demand — yet until USDFC there was no way to unlock dollar liquidity from FIL without selling it. USDFC gives storage providers, FIL holders, and DeFi users a decentralized stablecoin native to the FVM, in the way DAI did for Ethereum. Every USDFC in circulation is backed by FIL locked on-chain, adding a layer of utility and composability to the Filecoin economy. {% hint style="warning" %} **Borrowing against volatile collateral carries liquidation risk.** If FIL falls far enough, your Trove can be liquidated and you lose your collateral. Read [Liquidation](/usdfc-stablecoin/core-mechanics/liquidation.md) and the [Risk Disclaimer](/resources/legal/risk-disclaimer.md) before opening a Trove. {% endhint %} ## Where next | You are | Start here | | -------------------------------- | ------------------------------------------------------------------------------------------- | | New to USDFC | [Getting Started](/usdfc-stablecoin/getting-started.md) | | Ready to mint | [Creating Your First Trove](/usdfc-stablecoin/getting-started/creating-your-first-trove.md) | | Curious how it works inside | [Core Mechanics](/usdfc-stablecoin/core-mechanics.md) | | Looking for addresses and audits | [Contracts and Security](/usdfc-stablecoin/deployed-contracts.md) |