<div id="readability-page-1" class="page"><div><figure><div role="button" tabindex="0"><img alt="" src="https://miro.medium.com/max/1400/1*LeM8Q_lfwZVxYM8TTkADMQ.png" width="700" height="350" role="presentation"></div></figure>USM is built differently to be the new decentralized stablecoin to ensure self-sovereignty. It is the next generation stablecoin that proposes a solution to the existential crises of decentralization we currently have in stablecoin field.Decentralization is misunderstood<figure><img alt="" src="https://miro.medium.com/max/916/1*DuGaxAQHdcXxYMnPxfibeQ.png" width="458" height="595" role="presentation"></figure>UST argues that they are decentralized money for the decentralized economy because they have LUNA and BTC unlike fiat backed assets like USDT or USDC. However, if they are going to manage the collateral in a centralized manner with centralized control such as Terraform labs(TFL, owned by Do Kwon) and Luna Foundation Guard(LFG, also owned by Do Kwon), what is the difference between existing fiat-backed stablecoins other than storing collateral as cryptocurrency? They share the same counterparty risk. Being unsure of LUNA backing UST now, they are making exogeneous collateral using BTC.<figure><div role="button" tabindex="0"><img alt="" src="https://miro.medium.com/max/1400/1*HrHV5ASer87v6b78Fy4oSg.png" width="700" height="441" role="presentation"></div></figure>Other overcollateralized stablecoins with auction also has the same risk. Although most of the collaterals keeping stablecoin values are kept externally owned account(i.e. smart contracts), participants have access to the funds, and only operators eventually get access through liquidation. This indirect ownership can make the same risk. Magic Internet Money(MIM), in this case, failed the risk handling by failing to distribute MEMO token liquidations. DAI, on the other hand, is afraid of this risk and try to censor collaterals that are considered to be too volatile.There are new algo stablecoins to mitigate risk such as seigniorage, reserve buybacks and backstops, but that relies on a centralized account to operate. Therefore, they have the same counterparty risk. Fei’s PCV is controlled by privileged account, frax controls amos with team account.<figure><img alt="" src="https://miro.medium.com/max/916/1*XUOGSe1fMZj1rfBvbDwGQA.png" width="458" height="595" role="presentation"></figure>Decentralization must have self-censorship. Censoring other assets for decentralization is ironically the new centralization. The true decentralization of money in decentralized economy we deserve is self-sovereignty. USM introduces new decentralization that covers the counterparty risks and builds true decentralization.USM has scalable, self-censored design<figure><img alt="" src="https://miro.medium.com/max/476/1*5S9FHi_8ORmYIWebTIIPfQ.png" width="238" height="233" role="presentation"><figcaption><a href="https://tinyurl.com/liquidation-amm" rel="noopener ugc nofollow" target="_blank">https://tinyurl.com/liquidation-amm</a></figcaption></figure>Standard does not have counterparty risk on distributing liquidiations, which is the existential threat to stablecoins and centralized point of failure. Distributing liquidations are secured with immutable smart contracts and liquidations becomes an opportunity for stablecoin holders. Standard transfers liquidations to x*y=k pair to create arbitrage between USM and its collateral.Suppose x as the amount of USM to make arbitrage for collateral, and the arbitrage that one can get is<blockquote>k/x²</blockquote>Distribution through this equation discourages whales to take whole liquidations and evenly distribute liquidated collaterals. As stablecoins are swapped in liquidated pair, k in AMM increases, scaling stablecoin flow.USM as reserve currency platformThrough this fairly distributed liquidation Standard can accomodate any collaterals without counterparty risk by team. This will give permissionless access to:<ul><li id="2a29">stable transaction settlement layer of defi</li><li id="1381">leverage trading instrument</li><li id="2134">hedge to other volatile collaterals through its liquidation</li></ul>With censorship resistant and permissionless design to make stablecoin, Only STND which is a DAO token like CRV, only STND holders will be able to self-censor USM’s collateral.Conclusion<ul><li id="ade3">Current stablecoins are censored for its stability and have centralized access to manage funds</li><li id="94e9">USM is censorship resistant with decentralized access</li><li id="d08f">STND, A DAO token like CRV, will be used to accomodate defi with stablecoin on an asset with its network or project values such as ETH, BTC, and etc.</li></ul></div></div>

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USM is built differently to be the new decentralized stablecoin to ensure self-sovereignty. It is the next generation stablecoin that…
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