SmarDex

SmarDex is a decentralized finance ecosystem featuring a DEX and the USDN protocol, a delta-neutral synthetic dollar. USDN provides a fully decentralized stablecoin alternative that maintains price stability around $1 while generating yield for holders through fees from leveraged perpetual traders. The platform also includes P2P trading, AI tools, and cross-chain bridging.

The USDN protocol creates yield through a two-sided setup that balances supply and demand.

On one side, you have vault users (people who hold USDN). They deposit assets like ETH and receive USDN in return. On the other side, you have leveraged long traders — traders who borrow to bet that the price of an asset will go up. These two groups balance each other out, which is why the system is called "delta-neutral."

Where the yield comes from:

• Position fees — Traders pay a 0.04% fee when they open or close a leveraged long position. This fee goes into the vault.
• Vault fees — Users pay a 0.04% fee when they deposit or withdraw from the vault. This also goes into the vault.
• Funding rate fees — An 8% fee is taken from funding rate transfers (payments between long and short traders). This fee is saved up and later used to buy and burn SDEX tokens, which reduces supply.
• Minting fees — When someone mints new USDN, they must pay 5% of the minted amount in SDEX tokens. Those tokens are burned (destroyed), which shrinks the total supply of SDEX over time.

How the peg stays at $1:

If USDN trades above $1, the protocol triggers a rebase — it increases every holder's balance so that the price returns to $1. This effectively shares the extra value among all USDN holders.

In short, yield for USDN holders comes from three sources: trader fees, funding rate arbitrage, and the SDEX burn mechanism. All of this is enforced by smart contracts running on Ethereum.