Author

Chaos Labs

Overview

Chaos Labs recommends listing csUSDL within Gearbox’s USDC, USDT, DAI, DOLA, and GHO pools.

USDL

Lift Dollar (USDL) is a yield-bearing ERC-20 stablecoin centrally minted and burned by Paxos Issuance MENA Ltd., which is regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM). It can always be redeemed at a fixed rate of 1 USDL = 1 US dollar.

This jurisdiction and the Paxos company differ from Paxos Trust Company LLC, which issues USDP and PYUSD. It was chosen because, unlike the stricter U.S. regulations, ADGM's regime permits yield-bearing stablecoins, enabling USDL to offer yield while maintaining its fixed rate of 1$. This feature would not be possible under U.S. regulatory constraints. The two companies operate as separate legal entities with independent balance sheets and governance structures. Both entities publish monthly reserve attestations, but their asset compositions differ. Paxos Trust’s USDP and PAXG reserves are held in U.S. banks and vaults under NYDFS custody rules, whereas Paxos Issuance MENA Ltd’s USDL reserves are managed by ADGM-approved custodians.

USDL reserves are held in short-term, highly liquid assets, ensuring stability. USDL operates using the YBSV1_1 contract and generates yield through a rebasing mechanism, which automatically increases user balances based on the interest earned from its reserve assets

The contract defines several roles to restrict actions: SUPPLY_CONTROLLER_ROLE can mint and burn tokens, PAUSE_ROLEcan pause and unpause transfers, ASSET_PROTECTION_ROLE can block or unblock addresses and wipe balances of blocked accounts, REBASE_ADMIN_ROLE manages rebasing parameters such as setting the rebase period and max rebase rate, and REBASE_ROLE can trigger rebase events and increase the rebase multiplier.

Users can either deposit USD to mint USDL or convert USDC to USDL. To redeem USDL, users can convert their USDL deposits into USD, which is then automatically wired to their external bank account through Paxos. In this process, users only cover the blockchain transaction fee and the wire withdrawal fee. To exchange USDL for USDC, users can trade directly on the secondary market. The largest USDL/USDC trading pair is currently live on Curve, with a TVL of $30M.

wUSDL is the wrapped version of USDL, designed to provide a fixed, non-rebasing balance for users who want to avoid fluctuations in token supply. It utilizes the ERC-4626 standard, allowing users to deposit USDL into the contract in exchange for wUSDL. Users can wrap USDL to wUSDL through USDL’s UI and redeem wUSDL at any time, with the amount of USDL received increasing over time as yield accumulates. This redemption process is atomic, as demonstrated in the example transaction observed below.

csUSDL

csUSDL is a Morpho vault share token, with wUSDL as its underlying asset. Morpho Vault is a protocol for permissionless lending vaults built on top of the Morpho protocol. Through the MetaMorpho Factory, ERC-4626 compliant vaults are deployed, each dedicated to a single loan asset and capable of allocating deposits across multiple Morpho markets.

Each Morpho Vault is designed to reflect a specific risk profile. The Curator is responsible for setting the bounds of the vault by enabling or disabling certain Morpho markets and modifying supply caps. Each vault can have one Curator.

Technical specification

Price oracle

• USDL (0xbdc7c08592ee4aa51d06c27ee23d5087d65adbcd):
  • Main: Chainlink USDC/USD (0x8fFfFfd4AfB6115b954Bd326cbe7B4BA576818f6)
    • Trusted: false
• wUSDL (0x7751E2F4b8ae93EF6B79d86419d42FE3295A4559):
  • Main: ERC4626 (0xbdc7c08592ee4aa51d06c27ee23d5087d65adbcd) on top of Main USDL
    • Trusted: false
• csUSDL (0xbeefc011e94f43b8b7b455ebab290c7ab4e216f1):
  • Main: ERC4626 (0xbeefc011e94f43b8b7b455ebab290c7ab4e216f1) on top of Main wUSDL
  • Reserve: Chainlink USDC/USD (0x8fFfFfd4AfB6115b954Bd326cbe7B4BA576818f6)

Compatibility (zero price feed):

• Curve USDL/USDC stable NG (0xab96aa0ee764924f49fbb372f3b4db9c2cb24ea2)
• MORPHO (0x58d97b57bb95320f9a05dc918aef65434969c2b2)

USDC, USDT, DAI, GHO Pools

Add quota token: csUSDL Quota limit: 1,000,000 minRate: 0.05% maxRate: 45%

Compatibility: USDL, wUSDL, Curve USDL/USDC stable NG, MORPHO Quota limit: 00 minRate: 0.01% maxRate: 0.01%

USDC, USDT, DAI, GHO, DOLA Tier 1 CMs

Add collateral token: csUSDL LT: 85%

Compatibility: USDL, wUSDL, Curve USDL/USDC stable NG, MORPHO LT: 0%

Adapters:

• Curve USDL/USDC stable NG (0xab96aa0ee764924f49fbb372f3b4db9c2cb24ea2)
• ERC4626 wUSDL (0xbdc7c08592ee4aa51d06c27ee23d5087d65adbcd)
• ERC4626 csUSDL (0xbeefc011e94f43b8b7b455ebab290c7ab4e216f1)
• Uniswap V3 MORPHO/WETH 0.3% (0xc8219b876753A85025156b22176c2eDEA17aAC53)

Transaction log

Txs log can be found here Md5 checksum is 12930c017b676f0b61dba777d995064e