Launched in November of 2022 with Indigo Protocol v1, iUSD is the first fully collateralized and fault-tolerant native stablecoin on Cardano. Its peg tracks the median value of USDC, TUSD, and USDT, a structure that helps iUSD maintain stability even if one of those three assets depegs.

Indigo Protocol is a DeFi platform using Collateralized Debt Positions (CDPs) to introduce capital-efficient synthetic assets to the Cardano network. Users can acquire iUSD on a DEX like any other native asset or mint it directly by locking ADA as collateral.

To mint iUSD, users must deposit enough ADA to keep their CDP above the required Minimum Collateralization Ratio (MCR), ensuring over-collateralization. If the collateral value drops near the MCR, users may add more ADA to stay compliant. Should the collateral value fall below the MCR, Stability Pool providers facilitate a liquidation where they swap their iUSD for the user’s ADA, allowing the user to retain the iUSD while keeping the protocol solvent and the asset overcollateralized.

A distinct feature of Indigo is that users continue to earn ADA staking rewards from stake pool delegation even while their ADA serves as collateral in a CDP. This CDP Liquid Staking capability offers unique opportunities for trading strategies involving iUSD. The Indigo DAO governs iUSD settings and holds the authority to vote on adjusting the Minimum Collateralization Ratio for iUSD and other Indigo iAssets.