USDp

USDp is the native Polaris dollar.

It tracks the value of the US dollar while being backed by pETH through overcollateralized debt positions.

It exists entirely onchain and is designed to remain censorship resistant. Anyone can independently verify the collateral backing every USDp in circulation, while issuance and redemptions are only enforced by immutable code.

Using USDp

USDp is minted by depositing pETH as collateral and opening an overcollateralized debt position.

Each position must maintain a minimum collateral ratio of 115%, meaning every USDp is backed by at least $1.15 worth of pETH.

Once minted, USDp functions as a digital dollar that users fully own. It can be sent anywhere on Ethereum, used across DeFi applications or integrated into payment flows without relying on any centralized parties.

On top of that, users who want to earn protocol-native yield can deposit USDp into the USDp Earn Vault, which distributes both USDp and pETH from a portion of the interest paid by USDp minters and pETH liquidation gains. The mechanics of the Earn Vault are explained in the dedicated section of the documentation.

Maintaining the Peg

The USDp peg is supported by pETH overcollateralization and by market participants responding to arbitrage opportunities.

When USDp trades above one dollar, new USDp can be minted 1:1 against pETH collateral and sold into the market. The additional supply creates downward pressure on the market price.

When USDp trades below one dollar, market participants can redeem USDp for the underlying collateral, which removes USDp from circulation and reduces the circulating supply.

Together, these mechanisms continuously adjust the circulating supply in response to peg conditions while every USDp remains backed by pETH collateral.

Although permissionless 1:1 minting is a genuine innovation for decentralised stablecoins, Polaris builds on this foundation with an additional stability rate for debt positions. Later sections explain the stability rate in detail, but architecturally it automatically shifts collateral and debt from the most leveraged positions to the least, further strengthening the USDp peg during times of stress.