> For the complete documentation index, see [llms.txt](https://docs.usd8.ai/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usd8.ai/transparency/reserves.md).

# Reserves

Every USD8 is a dollar in the vault. How reserves are managed, how yield is generated, and how to verify it all.

**Every USD8 is a dollar in the vault.** USD8 is minted only against whitelisted stablecoins received by the mint vault, and reserves never move without an on-chain trace.

## Where the yield comes from

USD8's yield is generated **off-chain, from real assets** — not from token emissions, leverage loops, or reflexive on-chain mechanics.

Reserves are deployed into conservative, high-quality instruments — primarily government bonds and investment-grade fixed income, typically held to maturity — the same discipline that backs the largest dollar instruments in the industry. The portfolio is managed by a team with **years of experience at hedge funds and asset managers**, running institutional processes for valuation, risk and liquidity:

* **Daily valuation and yield confirmation.** The portfolio is marked and the day's realized return confirmed every day by the asset-management lead — this is the source figure for the on-chain distribution.
* **Liquidity laddering for redemptions.** The T+7 redemption cooldown gives the manager a predictable window, so redemption liquidity is planned — never forced sales into a bad market.
* **Separation of duties.** The person who manages assets, the person who approves the on-chain distribution, and the infrastructure operator are different people. No single person can move value unilaterally.

## From reserves to your NAV — daily, with two signatures

```mermaid
sequenceDiagram
    participant AM as Asset management
    participant P as Proposer
    participant A as Approver
    participant D as Rewards distributor
    participant V as sUSD8 vault

    AM->>P: Portfolio marked, daily return confirmed
    P->>D: Propose
    Note over P,A: Same person cannot do both
    A->>D: Approve
    D->>V: Yield minted and delivered
```

The distributor contract enforces the discipline in code: the proposer can never approve their own proposal, stale proposals expire in 24 hours, either party can veto, and a **daily mint circuit breaker** caps any single day's distribution at a small fraction of vault assets — even a compromised signer pair cannot inflate supply.

## Verify it yourself

Trust is good; verification is better. Everything the protocol claims is checkable:

| Figure                 | Where to verify                                                   |
| ---------------------- | ----------------------------------------------------------------- |
| Total USD8 supply      | Read directly from the USD8 contract                              |
| Staked in sUSD8 / NAV  | Read from the ERC-4626 vault — NAV = total assets ÷ total shares  |
| Locked in certificates | Read from the locker contract                                     |
| Daily distributions    | Every distribution is an on-chain transaction with a public event |
| Coverage ratio         | Published live on the [transparency page](https://app.usd8.ai)    |

The app's transparency page reads all protocol figures **directly from the contracts** — supply, NAV history and reserve disclosures — so anyone can re-derive them on-chain.

How the portfolio is held, who manages it, and how it is reviewed is documented separately — see [How Reserves Are Managed](/transparency/how-reserves-are-managed.md).

{% hint style="info" %}
Periodic reserve disclosures with supporting documentation are published on the transparency page as the protocol scales.
{% endhint %}