Wrapped USD

Wrapped USD is an ERC20-compliant smart contract aggregating other stablecoins, e.g., USDC, and DAI, to provide unified liquidity and interface for DeFi protocols to interact. Protocols are forced to integrate many stablecoins to gain liquidity which results in high overhead in cost, effort, and security. On the other side, innovative stablecoins are struggling to get adoption due to the high cost of entry to the DeFi space. Wrapped USD allows depositing any approved stablecoin within a set limit. These protocol settings balance risk and innovation, e.g., 90% USDC and 10% innovation coins provide a good balance between security and innovation. Wrapped USD list of approved stablecoins and settings have to manage by governance as this impossible to automate on-chain. Governance would require a separate token to vote on the list of approved stablecoins and their respective limits. Governance token would be distributed to liquidity providers to the Wrapped USD protocol based on their contribution to the stablecoins pool over time. The protocol would charge dynamically adjusted one time fee for minting and burning WUSD stablecoin. These fees will be distributed to the governance token holders to incentivize their work.

Wrapped USD protocol is an EVM smart contract written in Solidity using Foundry framework and deployed on Ethereum. It would be relatively easy to deploy the protocol to other EVM chains, e.g., Polygon, Arbitrum, and Optimism. The smart contract is written with heavy usage of the OpenZeppelin library.