SigmaUSD
The first eUTxO-based stablecoin, implementing the AgeUSD protocol on Ergo. SigmaUSD provides a decentralized, stable, and simple stablecoin solution with conservative collateral reserves, eliminating the need for liquidations.
What is SigmaUSD?
SigmaUSD is a decentralized stablecoin co-designed by IOHK, Ergo, and Emurgo. It implements the AgeUSD protocol with conservative collateral reserve settings (4:1–8:1 ERG:USD ratio), eliminating the need for liquidations while supporting a fully decentralized stablecoin emission setup.
Security & Stability
SigmaUSD operates with conservative collateral reserves, ensuring stability without forced liquidations. The protocol uses reserve ratio locking to maintain stability during market volatility.
- 4:1–8:1 ERG:USD reserve ratio
- No forced liquidations
- Reserve ratio locking mechanism
Decentralized & Accessible
SigmaUSD provides a fully decentralized stablecoin emission setup, allowing anyone with ERG to participate in minting and redeeming stablecoins through a simple, transparent process.
- Fully decentralized emission
- Simple minting/redeeming process
- Transparent oracle-based pricing
Developer Friendly
Built on Ergo's eUTxO model, SigmaUSD integrates seamlessly with ErgoScript and provides comprehensive developer tools for building DeFi applications.
- ErgoScript integration
- AppKit and Mosaik support
- Off-chain bot implementation
Fee Structure
SigmaUSD maintains a competitive fee structure with 2.25% total fees, where 2% goes directly to reserves and 0.25% supports frontend implementers.
- 2% fee to reserves
- 0.25% to frontend implementers
- SigmaRSV holders get fee rebates
How SigmaUSD Works
Reserve providers deposit ERG to mint reserve coins (SigmaRSV), while users mint SigmaUSD by depositing ERG. Both can redeem for ERG at the current oracle rate. The protocol maintains a floating reserve ratio to ensure stability.
Reserve Providers
Deposit ERG to mint SigmaRSV, profit from price appreciation and protocol fees.
SigmaUSD Users
Mint stablecoins with ERG, redeem for ERG at oracle rate when needed.
Accessing SigmaUSD as a Developer
Interact with SigmaUSD using Ergo's AppKit or Mosaik for frontend dApps. The SigmaUSD Bot provides off-chain automation capabilities for advanced use cases.
Example: Minting SigmaUSD
// Example: Minting SigmaUSD (pseudo-code) const tx = appkit.newTx() .from(reserveProvider) .to(sigmaUSDContract) .withAmount(ERG_AMOUNT) .mintSigmaUSD() .send();
Common Questions
What is a stablecoin?
A derivative product designed to minimize volatility, enabling stable value for DeFi and long-term financial modeling. SigmaUSD allows anyone who owns ERG to collateralize their ERG and create liquid value with a 2.5% fee.
Price stability is critical for finance; without it, creating long-term financial product modeling becomes difficult. The crypto space is highly volatile by nature, and SigmaUSD provides mechanisms to create stable value - the foundation for a prosperous economy.
How does the reserve work?
SigmaUSD operates on larger margin requirements than traditional crypto-backed stablecoins. It's backed by ERG within a floating reserve ratio between 4:1 and 8:1.
- Minimum threshold (4:1) protects SigmaUSD holders
- Maximum threshold (8:1) protects SigmaRSV holders
- Locking mechanisms prevent forced liquidations
Understanding Fees
Fees are set at 2.25%: 2% goes directly back to the reserves, and 0.25% goes to frontend implementers.
- SigmaRSV holders get fee rebates (1% back)
- More SigmaRSV = lower effective fees
- Potential for large returns as price appreciates
Where can I buy SigmaUSD?
Why might transactions fail?
There is currently significant demand. With Ergo being in the UTXO model and all dApp design patterns being quite young, we have throughput limitations.
Future improvements with asynchronous eUTxO protocols are being researched, but it was decided to provide something in the near term rather than waiting another year for research to solidify.
Why SigmaUSD?
When Dapps and use/utility are in place that supersedes the 2.5% fee, magic happens. Users can take their ERG, create SigmaUSD, and use that to create returns greater than the 2.5% cost of stability.
SigmaUSD is not just an opportunity to take a short position on ERG. Rather it's a way to use your reserve value to generate yield through DeFi on Ergo - decentralized exchanges, liquidity pools, and additional gateways.
What is SigmaUSD based on?
The design was inspired by StatiCoin. SigmaUSD implements the AgeUSD protocol, co-designed by IOHK, Ergo, and Emurgo, focusing on conservative collateral reserve settings.
Resources & Documentation
Additional Resources
"SigmaUSD allows anyone who owns ERG to collateralize their ERG and create liquid value. When Dapps and use/utility are in place that supersedes the 2.5% fee, magic happens."