Flow Of Funds

At Injera, we ensure that funds are always custodied by smart contracts. This allows for smooth flow of funds between Ethereum mainnet, and the Injective chain whilst ensuring that funds are not managed by Externally Owned Accounts (EOAs).

In general, USDi funds follow the following flow:

1. Mint: USDi is minted on Ethereum mainnet in 2 ways:

   1. ETH, BTC, USDT collateral is supplied by permissioned actors such as market makers to mint USDi. Collateral is custodied by our custodians.

   2. Minted via smart contract, and automatically bridged into Injective chain into a locked vault

2. Issuance: USDi can be minted, BUT NOT issued. Issuance is key, as it what determines the true circulating supply:

   1. When market makers mint USDi via supplying of assets. USDi is immediately issued.

   2. When USDi is minted into the locked vault, USDi is minted but not issued.

USDi Locked vault (Injective)

The purpose of the locked vault is to provide a safe access point for USDi to be bridged into Injective chain before issuance, such that EOAs do not have custody to such funds at any point in time. The locked vault will then supply USDi into Injera's money market where it is pending issuance. These USDi are then issued when users supply collateral into the money market to borrow the USDi. This results in an issuance of USDi via an overcollateralized debt position supplied by end users.