> For the complete documentation index, see [llms.txt](https://docs.quill.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.quill.finance/faq/usdusdq.md).

# $USDQ

#### **`What is $UDSQ?`**

**$USDQ** is a decentralized, algorithmic stablecoin that is soft-pegged to the U.S. dollar, designed to be both secure and scalable for use within the **Quill** ecosystem. It allows users to borrow against collateral, enabling them to access a stable, USD-pegged asset without relying on traditional financial systems or centralized intermediaries.

**`How is $USDQ different from other stablecoins?`**

Unlike many stablecoins that rely on centralized reserves or custodial assets, **$USDQ** is fully decentralized and algorithmically controlled. It's minted directly through user-deposited collateral in **Quill**’s protocol, leveraging zk-Rollup technology on the Scroll network to ensure low fees, high transaction speed and robust security. This approach minimizes centralization risks while offering a stable, DeFi-native currency.

**`What assets can be used to mint $USDQ?`**

Currently, users can mint **$USDQ** using select forms of collateral, specifically **wrapped Ethereum (wETH),** **wrapped staked Ethereum (wstETH),** **Ether-Fi staked Ethereum (weETH) and Scroll's native token (SCR)**. **Quill** may expand its collateral types in the future, allowing for greater flexibility and security in collateralization options.

**`What is the minting process for $USDQ?`**

To mint **$USDQ**, users deposit an eligible collateral asset into their Trove on the **Quill** platform. Based on the value of the collateral and the protocol’s collateralization requirements, users can mint **$USDQ** up to a certain limit. This minting process is automated through smart contracts, providing a decentralized and transparent way to create stablecoins without relying on external approvals.

**`How is $USDQ pegged to the USD?`**

**$USDQ** maintains its USD peg through a combination of collateralization mechanisms and incentives for redemptions. By requiring users to hold sufficient collateral in their Troves, **Quill** ensures that there’s always backing for **$USDQ** in circulation. In addition, users can redeem **$USDQ** directly for underlying collateral at the pegged value, helping to stabilize its price even during market fluctuations.

**`Are there any fees involved in minting or redeeming $USDQ?`**

Yes, the following fees apply to minting and redeeming **$USDQ**:

* **Interest Fee**: When users initially mint $USDQ by opening a Trove, your interest fee is applied, 7 days upfront.
* **Redemption Fee**: Users pay a small fee when redeeming **$USDQ** back to the underlying collateral. This fee is designed to discourage excessive redemptions, helping to maintain stability.

These fees contribute to **Quill**’s long-term stability and ensure that the system can cover its operational and liquidity needs.

**`Can I stake $USDQ?`**

Yes, you can stake $USDQ on the [Stability Pool](https://quill-finance.gitbook.io/faq/faq/price-stability-and-stability-pool) in order to receive a pro-rata share of the liquidated collateral and of the interest paid by the borrowers.