Centralized Exchange Execution

To increase the capacity and scalability of deUSD upon launch, deUSD has a whitelabled program enabling institutions and financial firms to mint and redeem deUSD, with those proceeds being used to run the basis trade on centralized exchange venues.

Long-term, Elixir envisions deUSD's backing existing entirely on a decentralized landscape (as DeFi liquidity fills in), with the network already able to support this.

• OES Onchain

  At launch the majority of the network’s deUSD liquidity and open interest will utilize liquidity on centralized exchanges (based on liquidity limitations), using leading OES providers like Copper Clearloop via a registered bilateral trading counterparty. Elixir's eventual goal is to move the entirety of the mechanism onto DEXs, once there’s sufficient liquidity.

• Workflow

  1. OES providers allow parties to keep funds in an on-chain MPC wallet, never actually sending the funds to the exchange, while trading on centralized exchanges with it

  2. This protects against counterparty exposure to an exchange (as funds remain onchain, instead of on the exchange) and the custodian if either party becomes insolvent

• Authorized participants (market makers)

  1. Authorized participants are the only counterparties that are able to mint / redeem deUSD

  2. Authorized participants will KYC and onboard with Elixir Foundation via a reputable vendor

  3. These participants atomically mint/redeem deUSD by pulling an indicative quote endpoint API and submitting a signed message. Mints of new deUSD are done with stETH, and redemptions to USDT. stETH will be used as collateral to create a short position of ETH in the same notional value in the perpetual futures market.

  4. Market makers can also provide stablecoin liquidity in the form of USDC and/or USDT into the Curve pools, with the ability to run an arbitrage between USDC/USDT and deUSD. Liquidity supplied in Curve pools will also be heavily incentivized (see Rewards section below).