Overview
trUSD is fully backed by the protocol’s reserve assets. The backing model is designed to maintain stability while enabling yield generation for strUSD holders through market-neutral trading strategies. Every trUSD in circulation is backed by real assets held in secure custody, verified in real-time by independent third parties.How Backing Works
The Backing Model
Unlike fiat-backed stablecoins that hold dollars in bank accounts, Tori’s backing consists of assets deployed across various hedged positions and instruments:| Aspect | Description |
|---|---|
| Full Backing | Every trUSD is backed by underlying assets |
| Hedged Positions | Positions designed for minimal directional exposure |
| Active Management | Professional management with continuous monitoring |
| Yield Generation | Returns from strategies flow to strUSD stakers |
How It Compares
| Model | Backing Type | Yield Potential |
|---|---|---|
| Fiat Stablecoins | Cash & T-bills in banks | Low (none for holders) |
| Algorithmic Stables | Algorithmic mechanisms | Variable |
| Tori (trUSD) | Hedged trading positions | Passed to strUSD stakers |
Real-Time Transparency
All backing is independently verified and publicly accessible:Proof of Reserves
Accountable
Independent, real-time attestations of all protocol reserves. Accountable provides cryptographic proofs that anyone can verify at any time.
- Total assets under management
- Asset composition and allocation
- Liability coverage ratio
- Reserve fund status
On-Chain Verification
All on-chain components are publicly verifiable:- Smart contract balances
- Token supply
- Transaction history
- Staking contract state
Custody Architecture
All assets are held in institutional-grade secure custody across two layers:On-Chain Assets
| Security Layer | Provider | Description |
|---|---|---|
| Smart Contract Audits | Sherlock | Comprehensive security audits with ongoing bug bounty |
| Real-Time Monitoring | Hypernative + Internal | AI-powered 24/7 threat detection |
| Multi-Signature | Internal | Critical operations require multiple approvals |
Off-Chain Assets
| Security Layer | Description |
|---|---|
| Institutional Custodians | Qualified custodians with segregated accounts |
| Counterparty Standards | Only established, reputable counterparties |
| Segregation | Protocol reserves never commingled with operations |
Risk Management Framework
The backing model incorporates multiple layers of risk management:Position-Level Controls
| Control | Purpose |
|---|---|
| Position Limits | Cap exposure to any single position |
| Concentration Limits | Ensure diversification across assets |
| Stop-Loss Rules | Automatic risk reduction on adverse moves |
Portfolio-Level Controls
| Control | Purpose |
|---|---|
| VaR Limits | Value-at-Risk constraints on total portfolio |
| Stress Testing | Regular scenario analysis for extreme conditions |
| Correlation Monitoring | Ensure true diversification |
| Liquidity Requirements | Maintain sufficient liquidity for redemptions |
Reserve Fund
A portion of protocol revenue is allocated to a Reserve Fund that serves as an additional buffer against adverse conditions.Verification
Anyone can verify the protocol’s backing:View Proof of Reserves
Access real-time attestations from Accountable showing total assets and liabilities.
Next Steps
Peg Mechanism
How trUSD maintains its dollar peg
Reserve Fund
Additional protection layer
Strategy
How yield is generated
Risks
Understand all the risks