Generic Protocol Overview
The Generic Protocol is the underlying infrastructure that powers GUSD and other whitelabeled tokens. It provides a multi-chain yield aggregation system where users deposit stablecoin collateral and receive GenericUnit tokens, which can be wrapped into branded tokens like GUSD. The protocol deploys collateral into vetted DeFi strategies and distributes earned yield across participating chains and dapps.
The Generic Protocol allows any project to launch a native stablecoin and benefit from composable liquidity and the best onchain yield, all without the need for an issuer.
Core Components
GenericUnit
GenericUnit is the protocol's core share token that represents ownership of the collateral basket. It maintains a target price of $1.00 and can be redeemed for underlying stablecoins. GenericUnit serves as the foundation for all whitelabeled tokens in the ecosystem, including GUSD, which wraps GenericUnit at a 1:1 ratio to provide a branded user experience.
GUSD (Whitelabeled Token)
GUSD is a whitelabeled version of GenericUnit that provides a branded interface for users. Multiple whitelabeled tokens can coexist on the same GenericUnit base, each maintaining a 1:1 wrap/unwrap ratio while sharing the same underlying collateral and yield mechanics. This architecture allows different brands to leverage the protocol's infrastructure without fragmenting liquidity.
Controller
The Controller is the central orchestration contract that manages all protocol operations. It calculates how many GenericUnit tokens to mint during deposits and how much collateral to return during redemptions. The Controller manages vault allocations, enforces deposit caps and diversification limits, integrates with Chainlink price oracles for accurate asset pricing, coordinates rebalancing operations between vaults, and controls access through role-based permissions.
Vaults
Vaults are specialized contracts that hold specific stablecoin types (USDC, USDT) and deploy them to yield-generating strategies. Each vault manages its own asset type and interacts with external DeFi protocols to earn returns. Vaults follow the ERC7575 Multi-Asset Vaults standard, allowing them to share GenericUnit as a common share token while maintaining separate collateral pools. The protocol maintains multiple vaults per asset type to ensure diversification.
Bridge Coordinators
Bridge Coordinators enable GUSD and GenericUnit to exist across multiple blockchain networks. On the main chain (Ethereum), the coordinator locks tokens when users bridge to other chains. On periphery chains (including Layer 2s and other networks), coordinators mint and burn tokens to maintain supply consistency. The bridging system uses multiple messaging protocols like LayerZero and Linea to ensure secure cross-chain communication while keeping the underlying collateral safely stored on the main chain.
How It Works
1. Deposit
Users deposit stablecoins (USDC, USDT, etc.) into the protocol and receive GenericUnit tokens at a 1:1 ratio (assuming assets are at peg).
2. Yield Generation
Deposited collateral is allocated to various yield-generating strategies across different vaults, earning base yield plus reward tokens.
3. Yield Distribution
Every 7 days, new GenericUnit tokens are minted representing earned yield and distributed proportionally to chains and dapps based on their TVL contribution.
4. Redemption
Users can redeem GenericUnit tokens for underlying collateral at the current redemption price, which reflects the total collateral value divided by total units outstanding.
Multi-Chain Architecture
Main Chain (Ethereum Mainnet)
Ethereum serves as the protocol's home base where all critical infrastructure resides. The primary Controller deployment manages all protocol logic and coordinates operations across the entire system. All vaults are deployed on Ethereum, holding and deploying the actual stablecoin collateral to yield-generating strategies. Chainlink price feeds provide accurate asset pricing data exclusively on the main chain, ensuring reliable valuation across all operations. The main chain Bridge Coordinator handles cross-chain message routing and maintains the authoritative record of token supply distribution across all networks.
Periphery Chains
GUSD and GenericUnit extend to multiple periphery chains, including Layer 2 networks and other blockchain ecosystems. Each periphery chain deployment includes a local GenericUnit token contract that represents the bridged tokens on that chain. When tokens are bridged to a periphery chain, the main chain supply is locked and an equivalent amount is minted on the destination chain, maintaining perfect supply synchronization across all networks.