Minting USDu

This section describes how USDu is minted, how collateral is utilized, and how assets move through the Unitas architecture once minting occurs.

Overview

USDu is a digital dollar issued by Unitas and backed by a delta-neutral strategy. The protocol separates user access from collateral operations to ensure orderly capital flows and risk management.

Most users do not mint USDu directly. Instead, they acquire USDu through secondary markets. Direct minting and redemption are restricted to whitelisted participants.

This design allows Unitas to control collateral inflow, hedging operations, and liquidity management without exposing users to operational complexity.

Who Can Mint USDu

Only whitelisted addresses are permitted to mint or redeem USDu. These participants typically include liquidity managers, protocol controlled accounts, or partners responsible for maintaining market depth.

Regular users acquire USDu through swaps on supported liquidity venues, including the Unitas application and decentralized exchanges.

Minting occurs in two scenarios:

• When secondary market liquidity is insufficient to support demand

• When a whitelisted participant deposits capital directly into the protocol to avoid slippage

In both cases, minting adds new USDu into circulation while ensuring that corresponding collateral enters the asset flow.

Adding Collateral

When a whitelisted participant mints USDu, they deposit USDC into the protocol. This USDC becomes the backing for newly issued USDu and is routed through the Unitas asset flow.

From this point forward, the protocol manages allocation, custody, hedging, and yield generation automatically.

Mint Asset Flow

Once USDC enters the system, it is processed through two coordinated paths designed to generate yield while maintaining delta neutrality.

1. JLP Acquisition

The majority of deposited USDC (80%) is used to acquire JLP. JLP is obtained through decentralized exchanges and transferred into an onchain multisig wallet controlled by the protocol.

JLP serves as the primary collateral backing USDu. Revenue generated by JLP contributes directly to the yield earned by the the protocol, which is distributed to sUSDu.

JLP produces revenue from trading activity within the Jupiter Perps platform, including execution fees, slippage, traders' losses and liquidations. Because this revenue is tied to trading volume, it is not dependent on market cycles.

2. Hedging and Custody

A portion of deposited USDC is routed to institutional custody through Ceffu. These funds remain segregated and are mirrored to the protocol’s Binance sub-account via MirrorX.

This capital is used exclusively as margin for short perpetual positions that offset the price exposure to assets which JLP consists of.

The hedge operates within predefined leverage bounds. Margin levels and exposure are continuously monitored and adjustments are made to maintain alignment with the underlying collateral composition.

This process removes directional exposure while allowing the system to retain fee-based revenue.

Resulting Position

After both paths are established, the protocol holds:

• JLP collateral in an onchain multisig

• Hedge margin in segregated institutional custody

• Short perpetual positions that offset asset exposure

Together, these components form a market-neutral position that supports USDu issuance and yield generation.

All of the onchain multising addresses can be found on the transparency dashboard.

Yield Routing

Revenue generated by the strategy flows into the protocol and is distributed according to system rules. Majority of the revenue (80%) is deposited into the staking contract, increasing the value of sUSDu overtime.

An additional portion (20%) is allocated to the protocol treasury along with an insurance fund, which acts as a buffer during periods of negative funding rates or in case the strategy incurs losses.

Liquidity Management

Unitas actively monitors USDu liquidity across supported markets. If imbalances occur, the protocol can mint or redeem USDu through whitelisted accounts to restore depth and ensure smooth user access.

This mechanism allows USDu to maintain reliable market liquidity without exposing users to redemption risk or operational delays.

Summary

Minting USDu is a controlled process that prioritizes solvency, transparency and risk management.

Whitelisted participants deposit collateral into the protocol. The protocol allocates that collateral across yield-generating and hedging strategies, maintains institutional-grade custody and routes revenue to sUSDu holders.