How does eUSD and peUSD work?

Rebase (eUSD) & Non-Rebase (peUSD)

Rebase LST holders can directly mint eUSD, while Non-Rebase LST holders have the ability to directly mint peUSD.

The operation of eUSD and peUSD differs, and the functionality of peUSD also varies based on whether it was directly minted from a Non-Rebase LST or converted from eUSD. The above is a graphic that illustrates how it works.

As an OFT (Omnichain Fungible Token) token, peUSD is compatible with most DeFi protocols. eUSD holders looking to utilize their holdings can convert them into peUSD at a 1:1 ratio. Notably, when eUSD is converted into peUSD, the yield on the underlying eUSD value continues to accrue. This yield can be immediately realized when converting peUSD back to eUSD. Users are therefore free and encouraged to spend the value of their eUSD holdings by converting to peUSD, without ever giving up their yield that accrues against their deposited collateral.

So, taken in combination, eUSD and peUSD provide users with the best of both worlds. They can simultaneously receive interest on their stablecoin holdings, whilst freely deploying them in further yield-bearing applications on a wide range of DeFi protocols.

For those who have directly minted peUSD from Non-Rebase LST's, they can enjoy the Omnichain benefits of peUSD while being assured that their collateral continues to gain value. This is due to the fact that Non-Rebase LST tokens are designed to automatically appreciate in value as staking rewards accrue.

Please be aware that the conversion from peUSD back to eUSD is constrained to the precise quantity of eUSD initially converted to peUSD.

The implementation of peUSD offers Lybra users a mutually beneficial solution. It signifies a substantial progression in Lybra's vision to provide an interest-accruing stablecoin that enables users to fully utiliise the value of all their LST holdings.