Unified Stable Dollar Suspended

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Unified Stable Dollar

The original proposal for the Unified Stable Dollar was put together on August 27th, 2020, as a stablecoin backed by multiple other stablecoins. The Unifi Hub website appears to be offline since November 30th, 2020. Minting was discontinued on February 21st, 2021.

It appears that the supply was limited, and peaked at ~148k tokens. There are 34,557 tokens remaining in supply. The price remained reasonably stable until March 2nd, 2021. However, there is then a large price increase up to a peak of $4.13, followed by a drop down past the peg, crossing over for the final time on June 15th, 2021.

It is unclear whether anything has happened to disable the redemption of the remaining coins for the underlying collateral, or whether it is simply a missing interface (and lack of technical knowledge or effort) which has these coins trapped.

This is a global/international case not involving a specific country.

About Unified Stable Dollar

"UniFi is a new Decentralized Flexible Organization (DFO) that researches and develops a responsible Decentralized Finance layer on top of Uniswap."

"uSD is a stablecoin based on Uniswap Liquidity Pools Minted by the magic rainbow of Uniswap stablecoin pools, and backed by the power of the Unicorn, uSD is the most secure and resilient stablecoin on Ethereum — ever. The only way it could be destabilized is if the entire stablecoin industry crashed."

"The aim of the Uniswap State Dollar (uSD) protocol is to build the most secure and resilient stablecoin on Ethereum—ever. Independent from any off-chain issuer, it is fortified against the risks inherent to all other stablecoins, and free of the anxiety that pervades the industry."

"uSD achieves this unprecedented level of stability by collateralizing other stablecoins. If any of them lose value or fail, it can simply rebalance itself to leverage the security of the others. And to account for excess due to fees in their pools, it can rebalance itself in another way."

"Independent from any off-chain issuer, it is fortified against every risk inherent to all other stablecoins, and free of the anxiety that pervades the industry." "The protocol achieves this unprecedented feat by collateralizing other stablecoins. If any of them lose value or fail, it can simply rebalance itself to leverage the security of the others. And to account for excess due to fees earned by their pools, it can rebalance itself in another way."

"uSD is backed by a selection of Uniswap’s (whitelisted) stablecoin liquidity pools. Anyone can mint it by adding these stablecoins to those pools."

"uSD pool collateral is locked. Stored in an external smart contract, it can’t be touched even by the UniFi DFO, precluding voter fraud by bad actors." "In the case of any bug or update, $UniFi holders can vote to pause the uSD smart contract. This prevents minting of new uSD or rebalancing of uSD, but holders will still be able to redeem it for the pooled stable coins, and thus revoke the collateral." "Even if the uSD protocol fails, and even if the UniFi DFO votes to update uSD to an undesirable new version, uSD holders will still be able to interact with the old smart contract — until all collateral is revoked — as well as the new one."

"uSD is indeed the most resilient and secure stablecoin in the industry. By taking advantage of Uniswap, a security layer with a decentralized core, it frees holders from dependence on censorship or centralized manipulation by states and stablecoin issuers, and resolves all risks that come with trusting the big stablecoin companies, like MakerDAO, Coinbase, etc."

"It is backed by a Decentralized Flexible Organization. $UniFi holders on the Ethereum network have 100% control of the code and Credit/Debit of the protocol. Nobody can stop or censor the UniFi-uSD protocol; for the first time, the Ethereum network doesn’t have to choose between stability and independence in a stablecoin; it can have both."

"Because we take a Responsible DeFi Approach, UniFi uSD minting is limited in its early stages."

"Independent from any off-chain issuer, it is fortified against every risk inherent to all other stablecoins, and free of the anxiety that pervades the industry. The protocol achieves this unprecedented feat by collateralizing other stablecoins. If any of them lose value or fail, it can simply rebalance itself to leverage the security of the others. And to account for excess due to fees earned by their pools, it can rebalance itself in another way."

"In less than a week of existence the supply of uSD is already backed by $58,520.07 of Stable Coins Pools as a collateral!" "Stablecoins are backed by a tangible value. In uSD’s case, this value is that of other stablecoins, collateralized. But because it is still in its infancy, it has low liquidity, and is not 100% stable." "The silver lining? This is a chance to earn, by arbitraging it!"

"If > $1, you can stabilize uSD and earn in a single transaction by Minting uSD, by adding to a stablecoin tier; Swapping your minted uSD for another stablecoin; And earning extra stablecoins from the difference. If < $1, you can stabilize uSD and earn in a single transaction by Swapping a stablecoin for uSD; Burning the excess uSD for another stablecoin; And ultimately ending up with same $ amount you started with plus extra stablecoins."

"As of [September 9th, 2020], the amount of minted uSD [was] already 147,965 (~ $148K). The arbitrage transactions (from the arbitrage unifihub.com smart contract) are growing quickly too and the price has already begun to stabilize at $1, thanks to more than $100K liquidity in Uniswap."

"Over the next few weeks [after November 2nd, 2020], [the team promised release of] the white paper and the plan for DFOhub v0.5 (coming Q1 2021) and a huge update for UniFi: an ITEM-based, cross-AMM uSD, and a general-purpose, cross-AMM deployer for farming contracts. This will integrate UniFi into the ecosystem as the financial layer for the organizations of the future."

"The event concluded with a big announcement: an upcoming DFO-based AMM that uses uSD as its main currency. It will be based on the new ITEM standard, which, for one thing, will enable batch-swaps; swapping multiple tokens in a single transaction will be cheaper than ever before."

"The second version of the Unified State Dollar [was promised to come] soon [after December 2nd, 2020]. Built on top of the ETHITEM standard, it [would] not only be the most secure stablecoin on the market, but also reward holders."

"v2 has multi-AMM compatibility; a staking position can provide liquidity to multiple DEXes!"

"And by farming uSD in some tiers, you’ll both farm other stablecoins and earn uSD from trading fees; v1 fees are all sent to the UniFi DFO, but v2 fees will be split between the DFO and v2 holders. This is the first time in Ethereum history you’ll be able to farm a stablecoin. We think. If you have ever farmed a stablecoin before, please embarrass us by posting the dApp in Discord."

"The relevant tiers will consist of (two stablecoins) + uSD, at a rate of 1 uSD = 1 stablecoin. The fees will be collateralized as uSD to ensure its supply stays = that of the stablecoins backing it."

According to CoinGecko, "A new version of Unified Stable Dollar - Wrapped USD (WUSD) has been deployed, please refer to the Wrapped USD Page for more info." "Wrapped USD (WUSD) has been inactive and is deactivated."

"$WUSD is minted by collateralizing pairs of whitelisted stablecoins in the pools of whitelisted AMMs. By decentralizing the distribution of its collateral, and capable of rebalancing it for stability, $WUSD is not vulnerable to any single point of failure; it can only fail if the entire stablecoin industry collapses."

"The protocol is governed exclusively by $UniFi holders via the Covenants DFO, and cannot be censored or manipulated by any state, issuer or any other off-chain centralized intermediary."

"$WUSD the most resilient stablecoin there is, and is unstoppable as Ethereum itself."

"[T]he minting of $uSD (Unified Stable Dollar, v1 of $WUSD) is suspended, but it remains secure and backed at a 1:1 ratio by collateralized stablecoins, and $uSD holders can continue burning it to redeem them without any issues."

"unified Stable Dollar price [as of November 4th, 2022] is $0.575265." "The social media metrics for unified Stable Dollar are constantly changing. As of November 4th, unified Stable Dollar has a total of 481 Twitter followers , and 2,415 Discord members."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

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• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

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• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Unified Stable Dollar Suspended

Date	Event	Description
June 15th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount at risk has been estimated at $148,000 USD. The total amount lost has been estimated at $35,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered is unknown.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Users should ensure that they know how to access the collateral backing any stablecoin. It would be recommended that multiple websites be available for any decentralized redemption.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.