sUSDi

Core functionality of sUSDi

Earning Yield

XI.Finance distributes the accumulated yield earned by the protocol to sUSDi (staked USDi) so in order to earn yield, users must stake USDi into the staking contract/vault to receive sUSDi, representing their share of the vault. sUSDi appreciates in value as it accrues yield.

Since all of the USDi reserves are used to generate yield, but only sUSDi receives the yield, sUSDi yield is higher than the underlying lending yield. sUSDi yield higher when less USDi is staked and vice-versa.

When unstaking, sUSDi is burned and the user will receive a proportional share of USDi based on the total USDi held in the contract relative to the outstanding sUSDi supply. For unstaking there are 2 options:

1. Instant withdraw - Instantly withdraw USDi from staking contract/vault, but requires additional fees, equaled to a 7-day yield.

2. Deferred withdraw - withdraws with a 7-day cooldown period and no fee.

This mechanics gives protocol more sustainability and a choose to a user on how to operate with his funds.

About ERC-4626

sUSDi is an ERC-4626, which is an Ethereum token standard designed to optimize and standardize the way yield-bearing vaults interact with ERC-20 tokens. It improves efficiency, security, and composability for protocols that manage deposits, withdrawals, and yield distribution.

1. Standardized Vault Interface

   • ERC-4626 provides a universal structure for tokenized vaults, ensuring interoperability across DeFi protocols.

2. Deposit & Withdrawal Mechanism

   • Users deposit USDi into the vault and receive shares (sUSDi).

   • Upon withdrawal, users redeem their shares (sUSDi) for the underlying assets (USDi) plus any accrued yield.

3. Automated Yield Distribution

   • Yield is generated through strategies like lending.

   • The total assets in the vault grow as yield is distributed to the vault, increasing the value of shares over time.

4. Improved Gas Efficiency

   • Standardized functions reduce redundant contract interactions, lowering gas costs.

5. Enhanced Composability

   • Protocols can easily integrate with ERC-4626 vaults, enabling plug-and-play compatibility with lending, staking, and yield-aggregating platforms.