Add USDU-USDC on Ethereum to the Gauge Controller

Gauge Proposals
1

Summary:

Proposal to add the USDU-USDC Pool on Ethereum Mainnet to the Gauge Controller.

References/Useful links:

• Website: https://usdu.finance

• Documentation: https://usdu.gitbook.io/docs/

• Github Page: https://github.com/wrytlabs/usdu-core  

• Defillama: https://defillama.com/stablecoin/usdu-finance

Protocol Description:

USDU.finance is built to enable institutional-grade carry trades at scale. The protocol issues USDU, a yield-collateralized USD stablecoin minted exclusively by the protocol against active, credit-rated lending positions.

USDU is specifically designed to unlock ultra-cheap leverage — allowing borrowers to access capital below the risk-free rate and loop it into AAA-rated assets such as the UBS Money Market Fund or equivalent instruments.

By maintaining overcollateralized exposure to high-quality, yield-bearing assets and ensuring that only the protocol can mint or burn USDU, the system remains non-algorithmic, structurally solvent, and resistant to depeg dynamics. In short, USDU.finance enables scalable, low-cost carry trade strategies, bridging DeFi liquidity with traditional-grade collateral efficiency.

Motivation:

For USDU to enable low-cost carry trades, it must maintain deep, efficient on-chain liquidity against major stablecoins like USDC. This liquidity ensures that large borrowers and institutions can enter and exit carry positions with minimal slippage and predictable pricing - critical for scaling the strategy.

However, deep liquidity doesn’t emerge organically at launch. To bootstrap and sustain it, incentive structures such as CRV emissions are deployed on the USDU-USDC Curve pool. These incentives compensate liquidity providers for the opportunity cost of capital, attracting substantial TVL that tightens spreads and stabilizes the peg.

In essence, CRV incentives are a capital efficiency mechanism—they align liquidity providers’ returns with the protocol’s goal of offering cheap, scalable leverage against AAA-grade assets like the UBS Money Market Fund.

Specifications:

  1. Governance: Aragon DAO

  2. Oracles: Does the protocol rely on external oracles? No

  3. Audits: Blockbite Audit

  4. Centralization vectors: No.

  5. Market History: No.

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