How it Works

The Mu Digital protocol provides DeFi users with access to a diversified pool of USD-denominated, principal-protected RWAs through a dual token structure comprising of a safe yield token and a high yield token

Dual Token Structure

AZND: Asian Dollar

  • Synthetic Dollar designed for capital stability

  • Typically overcollateralized by the muBOND junior tranche (~118% at inception)

  • 75% of the yield from the Asset Pool is allocated to the AZND locking contract (see locking)

muBOND: High Yield Token

  • Junior tranche offering higher potential returns in exchange for higher risk

  • Absorobs losses before AZND

  • Reprices periodically to reflect performance of underlying portfolio

  • 25% of the yield from the Asset Pool is allocated to muBOND holders

Underlying Asset Pool

The underlying portfolio consists of high quality fixed income assets held with reputable TradFi custodians. These asset are all denominated in USD (no FX risk) and are principal protected at maturity

These assets include, but are not limited to:

  • Government bonds

  • Corporate bonds

  • Bank bonds

  • High Yield bonds

  • Private Credit

We target a gross APY of 7-10% for the Asset Pool, although returns may deviate from these targets subject to markets and the performance of the underlying portfolio

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