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Treasury Allocation Through Governance

STBL employs a structured treasury allocation model, ensuring that protocol revenue is effectively distributed to enhance ecosystem growth, risk mitigation, and governance incentives. The Yield Pool incorporates a fee extraction mechanism, which directs 20% of the gross yield generated from collateralized and tokenized assets to the treasury​.

1. Treasury Reserve​

A significant portion of treasury funds is allocated to the Treasury Reserve, which is governed by USST token holders. These funds are strategically deployed for:

  • New asset vaults, expanding protocol capabilities.
  • Infrastructure development, including enhancements to protocol security and efficiency.
  • Liquidity incentives, ensuring deep, stable markets for USST across DeFi platforms. The governance process dictates how these reserves are utilized, ensuring transparent decision-making and long-term financial sustainability.

2. Loss Reserve Pool​

To safeguard against collateral risk, STBL maintains a Loss Reserve Pool, which covers potential defaults associated with tokenized real-world assets (RWAs).

  • This risk buffer ensures that treasury-backed stablecoins remain fully collateralized.
  • Estimated default risk is approximately 0.20%–0.33%, and the loss reserve is adjusted accordingly.
  • Funds in this reserve are managed by on-chain governance, allowing community-driven risk mitigation strategies. This built-in safety mechanism enhances trust and reliability in STBL's decentralized financial infrastructure.

3. Protocol Rewards & Governance Incentives​

A portion of treasury funds is allocated to USST governance rewards, ensuring active community participation in protocol decisions.

  • USST holders who stake their tokens receive a share of protocol revenue, reinforcing long-term commitment.
  • Staking rewards are distributed based on governance activity and participation levels.
  • Incentives encourage strategic decision-making, aligning governance with STBL's long-term vision