pawUSDC — Technical Specification

Token Type: ERC-20 Symbol: pawUSDC Backing Asset: USDC (1:1+ USDC) Exchange Rate: Variable, accrues yield Primary Role: Lending pool LP token and settlement asset for UBS system-wide borrowing

🧮 Minting Logic

• Users deposit native USDC into the protocol.

• Receive 1:1 pawUSDC at time of mint/depends on the exchange rate.

• Global Exchange Rate starts at 1.00 and increases with net yield.

• Exchange Rate is stored and updated per epoch block.

ExchangeRate = TotalBackingUSDC / TotalSupply_pawUSDC

📈 Yield Accrual & Backing Growth

pawUSDC increases in value as yield flows into its backing pool.

Yield Sources:

Source	Accrues To	Description
Borrowing Interest	pawUSDC Backing	70% of all UBS borrow interest flows here
Liquidation Fees	pawUSDC Backing	70% of liquidation fee from vault positions
Redemption Fees	pawUSDC Backing	100% of pawUSDC redemption fees (e.g. 0.25%)
Other	pawUSDC Backing	Partner incentives routed to LP pool or other sources...

🏦 Lending Pool Characteristics

pawUSDC represents shares in a centralized USDC pool used across MeowFi UBS.

Pool Stats (exposed on UI/on-chain):

• Total Supplied USDC

• Total Borrowed

• Utilization Ratio

• Lending APY (derived from interest flows)

• Exchange Rate (USDC / pawUSDC)

🔐 Risk Parameters & Controls

LTV Model:

• Default LTV: 70%

• Liquidation Threshold: 71%

• Liquidation Penalty: Defined per vault

Collateral Management:

• Collateral accepted: NFT Receipts, LP tokens

• Collateral value derived via Oracle + Vault Yield

• Supports top-up / withdrawal of collateral

• Health Factor updated dynamically per position

🧮 Oracle Integration

pawUSDC requires redemption-rate oracle support for integrations and pricing:

• Oracle Format: getExchangeRate() on-chain + REST endpoint

• Supported: Pyth (WIP), Switchboard (simulated or crate-based)

• Oracle Price = ExchangeRate * 1e18 (scaled)

💸 Redemption Logic

• Users may redeem pawUSDC → USDC at current Exchange Rate

• Redemption Fee = 0.25% (configurable)

• Redeemable: USDC_out = pawUSDC_amount × ExchangeRate × (1 - 0.0025)

• All redemption fees go to pawUSDC backing

⚙️ Withdraw Controls

To prevent liquidity crunches:

• Withdraw limits apply based on Utilization Ratio

• Max withdrawal per txn capped if pool >80% utilized

• Admin override possible for emergency withdrawal disable

🔐 Caps & Safeguards

• Per-Vault Max Borrow Caps prevent one vault from draining the entire USDC pool

• Global Borrow Cap ensures no overexposure

• Reserve Factor: Defined per vault/pool, e.g., 5-10% retained for redemptions

🔍 Dev Tooling

• Contract: PawUSDC.sol (ERC-20 + custom rate logic)

• View Functions:

  • getExchangeRate()

  • getUtilizationRate()

  • getBackingBalance()

  • getTotalBorrowed()

• Events:

  • Minted(address, amount)

  • Redeemed(address, amount)

  • ExchangeRateUpdated(uint256)

🧠 Notes

• pawUSDC is an appreciating asset and not pegged to 1 USDC but starts at 1:1 and only increases in value

• There is no rebasing; all value accrual is via exchange rate mechanics

• Lending interest = dynamic; always derivable via protocol performance

• Liquidity providers are never diluted; value tracks real-time earnings