USDK

The K stands for K-ing

USDK is the USD-pegged, overcollateralized and native stablecoin on Swell Network. Issued by Orki Finance and backed by LST/LRT-based assets like swETH, swBTC and rswETH.

• Crypto-Only Backing: 110% Backed exclusively by crypto assets, with no reliance on real-world assets or centralized custody.

• Immutable Protocol: The system is not subject to collateral changes or upgrades, significantly reducing risks.

• Direct Redeemability: $USDK is always convertible into its underlying assets in a fast and liquid manner.

What are $USDK peg mechanisms?

Orki Finance’s market-driven monetary policy uses user-set interest rates to maintain $USDK peg, dynamically responding to price fluctuations:

• Above $1: Borrowers reduce interest rates to lower redemption risk, making borrowing more attractive and reducing demand for holding $USDK . This corrects the price downward.

• Below $1: Arbitrageurs initiate redemptions to restore the peg. Borrowers raise interest rates, increasing demand for $USDK (and Earn deposits), pushing its price upward.

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Pools are based on their risk tolerance and preferred collateral exposure. By aligning with specific LSTs or LRTs, users can diversify or concentrate risk.

Separate pools ensure systemic risk is minimized issues in one collateral class don’t affect the entire ecosystem. However, $USDK holders remain collectively exposed to its peg and the collateral backing it.