# USDr Stablecoin {% hint style="info" %} **Good to know:** $USDr (stablecoin) and $RATIO (SPL governance token) are the 2 tokens associated with the protocol. {% endhint %} **Definition** $USDr is a Ratio-issued over-collateralized stablecoin soft-pegged to US Dollar. $USDr is backed by a growing basket of crypto assets, starting with a stablecoin-stablecoin Liquidity Pool (LP). $USDr is the first algorithmically risk-adjusted Collateralized Debt Position (CDP). Users can mint $USDr against LP collateral with a collateralization ratio, dynamically adjusted based on the calculated risk of the underlying assets. **$USDr Tokenomics** Over the long-run, $USDr token economics are guided by a few key forces. These forces influence the supply and demand curve for $USDr. **Forces Influencing Demand** The demand for $USDr tokens on the open market will come from a few sources. 1. **Desire for stability.** DeFi users need to be able to trade into stable assets with ease, which will drive demand for a well-designed, decentralized stablecoin like $USDr. $USDr acts as a proxy for risk assessment on a diversified basket of yield-bearing stable assets. It is a negative interest form of debt because it is backed by assets that gain yield and avoid volatility. 2. **$USDr repayment.** Users mint $USDr against crypto-assets in their Ratio vaults. In order to unlock their assets from the vault, they need to return their $USDr to Ratio. They may have to buy $USDr off the open market to do so. 3. **Peg Stability Module (to come).** $USDr is a stablecoin soft-pegged to the U.S. Dollar. In order for the value of 1 $USDr to stay as close to the value of 1 USD, people need confidence that the exchange rate is consistent and reliable. To evoke that confidence, we are creating a peg stability module. The peg stability module is essentially a direct swap between a user's wallet and Ratio's treasury such that 1 $USDr can always been redeemed for 1 $USDC at any time, and vice versa. 4. **$USDr-based financial products (to come).** Ratio's larger vision is to create risk-adjusted financial products using $USDr. As Ratio makes $USDr-based financial products available to be bought and sold, this will generate additional demand for $USDr. **Forces Influencing Supply** Outside of the normal release of tokens into Ratio's treasury and distributions to its team and investors, there are two sources of supply of $RATIO tokens on the open market. 1. **Desire for volatility.** $USDr is a stablecoin. If the market decides it wants more exposure to volatile assets, it may sell $USDr to buy them. 2. **$USDr creation.** Whenever a user adds collateral to their Ratio vault and mints $USDr, this increases the supply of $USDr. 3. **Peg Stability Module.** Because the peg stability module works both ways - meaning users can swap 1 $USDr for 1 $USDC or 1 $USDC for 1 $USDr - a net positive amount of $USDr could be created. 4. **$USDr-based financial products (to come).** Each $USDr-based financial product that is minted increases the supply of $USDr. **As you can tell, these forces are designed to be largely balanced. This is meant to support the steady and sustainable growth of $USDr over time.** --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.ratio.finance/our-business/ratio-tokenomics/usdr-stablecoin.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.