Mint Validity Checks
Last updated
Last updated
To ensure the integrity and stability of USDu, Unipay implements a series of robust Mint Validity Checks during the minting process. These checks safeguard the protocol against fraudulent activity, insufficient collateral, and operational risks. By combining on-chain and off-chain verifications, Unipay guarantees that every minted USDu adheres to strict security and compliance standards.
Sufficient Collateralization: The collateral provided by users must meet the minimum collateral ratio requirements. This ensures that all minted USDu remains fully backed.
Asset Whitelisting: Only approved collateral types, such as SOL, ETH, and BTC, are accepted for minting. These assets are vetted for liquidity and compatibility with our hedging strategies.
Dynamic Valuation: The protocol uses real-time price feeds from trusted oracles like Pyth Network to evaluate the value of deposited collateral.
Market Liquidity Check: Before minting USDu, the protocol verifies that there is sufficient liquidity in perpetual futures markets to execute the delta-neutral hedge.
Funding Rate Validation: Funding rate spreads are evaluated to ensure the strategy generates positive yields without excessive risk.
Hedging Execution Confirmation: The protocol confirms the successful initiation of hedging positions before proceeding with USDu issuance.
Accurate Pricing: For RFQ-based transactions, the system ensures that the quoted price reflects real-time market conditions, incorporating both spot and derivative market data.
Signature Verification: On Solana, mint requests utilize the , designed for high efficiency and secure validation tailored to Solana's architecture. This ensures seamless integration with Solana's high-throughput and low-latency environment.
On Ethereum, mint requests are signed using the EIP-712 standard, a widely-adopted method for gas-efficient and secure off-chain validation. EIP-712 enables structured data signing, enhancing the integrity and usability of minting requests across decentralized systems.
Custom RFQ Validation on Solana: On Solana, mint requests are processed using Unipay’s custom RFQ standard to ensure seamless integration and accuracy.
Address Compliance: The user’s wallet address is checked against Unipay’s compliance layer, ensuring it meets regulatory and protocol-specific requirements.
KYB for Institutional Users: For institutional participants, Know Your Business (KYB) checks are performed to validate the entity’s legal and operational compliance.
Smart Contract Verification: All minting transactions are routed through audited and verified smart contracts (Ethereum) or Solana programs to ensure secure and deterministic execution.
Replay Protection: Mechanisms are in place to prevent double-spending or reusing the same minting request.
Asset Synchronization: Collateral assets and hedging positions are synchronized across on-chain and off-chain systems to maintain operational consistency.
Peg Stability Assessment: The protocol evaluates the impact of the minting request on the overall peg stability of USDu.
Protocol Limits: Ensures that the total minted supply remains within protocol-defined thresholds to avoid over-issuance.
Error Handling: If any validity checks fail, the minting request is rejected, and detailed error messages are returned to the user.
Unipay’s Mint Validity Checks are designed to provide users with a seamless, secure, and transparent minting experience. By leveraging a combination of decentralized infrastructure, rigorous validation mechanisms, and real-time monitoring, Unipay ensures that USDu remains a reliable and scalable stablecoin for the Web3 ecosystem.