> For the complete documentation index, see [llms.txt](https://pillar-dao.gitbook.io/pillar-dao-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://pillar-dao.gitbook.io/pillar-dao-docs/tokens/pusd.md).

# pUSD

pUSD is an algorithmic stablecoin, governed by the protocol to maintain stability through incentive-based mechanisms and flexible collateral management. Its design allows the protocol to dynamically respond to market conditions while optimizing capital efficiency.

pUSD is backed by USDC at launch, ensuring a stable entry point and user confidence. Over time, the protocol may evolve its collateral model to increase capital efficiency and unlock more flexible yield mechanisms.

**Launch Collateralization:** 1:1 backed by USDC.e

**Adaptive Collateralization:** The protocol aims to optimize the ratio of backing assets to minted pUSD, balancing stability with protocol growth.

**Reward Claim Fee:** A time-weighted claim fee applies to rewards. Currently, the fee is set to 20%, but may be changed to support long-term protocol health and sustainability.