USDtz for Liquidity Baking

We at StableTech (Tezos Stable Technologies, Ltd.) propose the additional inclusion of USDtez (Symbol: USDtz) token contract to Liquidity Baker for the H upgrade.

Contract: KT1LN4LPSqTMS7Sd2CJw4bbDGRkMv2t68Fy9


USDtz is one of the first and longest running tokens on Tezos, debuting in May 2020, almost as early as tzBTC. When Dexter 1.0 launched on September 30th 2020, it launched with two pairings: XTZ/tzBTC and XTZ/USDtz. Being a ‘homegrown’ Tezos stablecoin without any goals or endeavors outside of Tezos DeFi, the project creators and USDtz users have worked hard to promote and educate others about the Tezos DeFi ecosystem from Day 1.

USDtz is part of the StableTez project which is dedicated to the expansion of hard-backed dapp-programmable liquid assets on Tezos. StableTez is part of StableTech (Tezos Stable Technologies, Ltd., which is backed by Draper Goren Holm LLC. Development of StableTech is conducted by contracted firms in the Tezos Ecosystem such as Cryptonomic, Bolt Labs, and Wealthchain. StableTech itself is governed by the Tezos Stablecoin Foundation, which is both a non-profit and a non-shareholder foundation.

Why USDtz

According to daily market statistics compiled by Coinmarketcap, Coingecko, and Messari, the most traded item daily (majority) with tez (XTZ) is USD (and FIAT-backed USD stablecoins). So long as market participants measure (refer to) the value of their assets as “the price of Bitcoin” or “the price of Tez” with the implication that ‘price’ refers to the USD equivalent value, the USD will continue to be tez (XTZ) most traded-with asset.

Reflective of this pattern, the ratio of trading to liquidity pool size on Quipuswap has consistently been the strongest with the USDtz-XTZ. In fact, despite having 1/10th the liquidity pool size of some other pairs on Quipuswap, USDtz not only achieves higher volume relative to its liquidity, but generally achieves greater volume, period than its higher-supplied peers. This volume history for the USDtz-XTZ pair can be observed daily on

USDtz will prove to be not only popular as a liquidity mining vehicle for ‘stakers’ of Liquidity Baking, but will be highly traded on Liquidity Baker’s XTZ/USDtz swap pool as well.

Furthermore, a scaled USDtz (as a FIAT-backed/convertible stablecoin) will serve to help stabilize other FA-based USD stablecoins—those that are algorithmically backed (e.g. kUSD, uUSD). Historically, both on Quipuswap and on Dexter (1.0), USDtz has held the strongest peg to the USD of any USD stablecoin. This is because of the market confidence that USDtz is convertible and that its reserve is soluble. The mere presence of a convertible instrument for ‘algocoins’ will add to market confidence to those algocoins. That is, the confidence that one can convert to a FIAT-backed option if they choose to can bolster confidence in a 1-1 peg for those algocoins.

Even as other FIAT-backed USD stablecoins enter Tezos, the demand for USDtz will continue to increase. Stablecoin portfolios benefit from diversification just as any portfolio benefits from diversification. Moreover, USDtz is and will always be Tezos-first. Specializing in accommodating advances in the Tezos protocol (e.g. z-saplings), users can expect USDtz to have the best features of any FIAT-backed USD stablecoin, to which other FIAT-backed USD stablecoins will take their cues. As the rich tapestry of Tezos applications continue to expand, requiring new and greater needs from dapp-programmable financial assets, of all FIAT-backed USD stablecoins USDtez will continue to position itself as the Tezos developer-friendly option as well.

Reserves and Convertibility

USDtz is hard-backed by a fully convertible collateral reserve (like tzBTC). The USDtez reserve is fully-backed by FIAT, using stablecoins that maintain full-reserves of assets convertible 1-1 to FIAT cash. The convertibility of USDtz tokens have been conducive to USDtz’ success in maintaining its parity to the United States Dollar.

Adding to market confidence in the convertibility of USDtz and the solubility of its reserve, Armanino LLP has been conducting monthly audit/attestation reports, which are made public on the USDtz website. Currently, the entire reserve itself can be observed in real-time via an etherscan link to the reserve wallet.

Depth and Scalability

The reasoning cited for the choice of tzBTC for Liquidity Baker’s initial pool has been its deepness (i.e. the amount of liquid supply available).

“For liquidity pairs, we chose tzBTC since it’s the deepest token that we currently have to trade against and we’re confident it can handle this increase in supply. Tez is also fairly closely correlated with BTC. So, there’s nothing special about tzBTC, it’s just the best that we have right now in order to provide liquidity for tez.”

This is reasonable and a fair metric. Approximately 356.94 tzBTC were minted in March 2020 near the launch of tzBTC launched, for a Liquidity Provider firm (ostensibly, Woorton). This represents virtually the only time in which a minting operation was called for tzBTC and no minting operations had been called since then. To date the ‘burn’ operation has never been called, which technically means no convertibility has been demonstrated yet for tzBTC. Until very recently 350 (of 357) tzBTC remained securely in a single wallet.

USDtz is not only a ‘homegrown’ FIAT-backed USD stablecoin, but also its supply has grown organically through the activities of many individuals throughout the Tezos community. Whereas tzBTC has had (as of the time of writing this) exactly 2 minting operations (1 of which was the initial test amount for the contract), and has had 0 redemption (burn) operations, USDtz has had hundreds of minting operations and has had over a dozen redemption (burn) operations. The Tezos DeFi community has organically mobilized (among minters, arbitrageurs, liquidity miners, farmers) around the supply creation/redemption dynamic of USDtz. That organic mobilization has only been strengthening over time, with more participants and more participation.

Furthermore, USDtez is capable of rapid scale, deeper and faster than tzBTC. This has been demonstrated during the Tezos DeFi June boom of June 2021. At the time Liquidity Baker was first proposed USDtz peak supply was approximately 360,000. By early June, much USDtz had been converted back to its collateral by users, bringing supply down to 240,000. While this decreased ‘deepness’ momentarily, it grew trust and confidence in USDtz by the Tezos DeFi market.

In early June 2021, with the mere launch of a single non-interest offering equity-earning pool for USDtz on PlentyDeFi, a boom in demand for USDtz supply had grown to over $1,250,000 in less than a week (though this did not strain scaling capacity by any means, and USDtz could have scaled greater and faster had demand warranted it). USDtz is as scalable as its collateral. Millions of dollars can be converted to and from USDtz each day if demand warranted it.

Today, (as of the time of writing this) USDtz supply stands at over $3,300,000, which is a greater USD value than was the USD value of the entire 357 tzBTC supply as it was measured for most of 2020.

Minting and Redemption

The process of minting USDtz requires 3 steps among 3 respective parties: minters, compliance, and administration. Minters (or minteries) initiate the request and submit the corresponding collateral. Compliance processes the validity of the request and processes the collateral submitted. Administration lastly confirms the success and validity of the first 2 steps and completes the mint.

Prospective minters may enroll at Qualifying for enrollment to become a minter or mintery is subject to compliance with jurisdictional and regulatory requirements. The acceptable jurisdictions which can enroll will likely be expanded to include more participants over time.

Compliance management is handled by TokenSoft. TokenSoft has been processed KYC/AML for the Tezos crowdsale allocations for years starting at the very beginning of verifications/activations in 2018.

Administration is handled by StableTech representatives, protecting the integrity of the project overall for the benefit of both the respective users and for the Tezos DeFi ecosystem. It is at this step and only at this step that the USDtz minting and burning process can complete. The pertaining signature verifications are also included in each monthly audit/attestation report by Armanino LLP.

Redemptions work similarly. The minter requests a redemption, which is confirmed by the latter 2 steps. After the USDtz is burned from the minter’s wallet, the corresponding collateral is sent to the minter’s wallet.

This entire process will be migrated to a sequential multi-sig process in August 2021.

Getting USDtz

There are four main ways of acquiring USDtz: AMM, Bridge, Minteries, Minting.

The most basic way is purchasing USDtz on an AMM like Quipuswap (Quipuswap XTZ to USDtz). This is a simple and familiar process, but is subject to liquidity constraints. Furthermore, frequent ‘correcting’ of the price on Quipuswap (as it is an AMM) by arbitrageurs, other sources for the acquisition of USDtz are necessary. Regardless, USDtz is so popular on Quipuswap that on most days its pairing (with XTZ) achieves the highest volume per liquidity of any pairing on the AMM.

If slippage on Quipuswap is too high for the depth in which one wishes to purchase USDtz, or if a market participant desires to purchase USDtz so to buy XTZ correct the price on Quipuswap (effectively removing Quipuswap as an option in this instance), TezEx cross-chain bridge provides decentralized cross-chain swaps between USDC and USDtz as well as USDT and USDtz to depths of $30,000-100,000 replenished 1or 2 times per day at minimum and growing in size and frequency of replenishment.

If there is not enough liquidity replenished yet on TezEx at a given moment, or if one wishes to acquire [enough] USDtz to supply TezEx itself, then using the services of a mintery is a great option. A mintery is an enrolled USDtz minter that offers minting and redemption as-a-service to market participants. Virtually all minteries started as Tezos public bakers. Bakers work hard building trusted reputations for their baking delegation services. Many bakers have been building these reputations for years. It makes sense that this trust and track record be leveraged to extend to new activities that further support the Tezos ecosystem, including minting and redemptions of USDtz.

USDtz minting is not exclusive to Minteries though. If a market participant does not want to go through a Mintery, or if they just don’t want to go through any intermediaries, then they may enroll as a minter themselves, pending qualification. One can enroll to become a minter either as an individual or as an institution (For liquidity provider firms, and for bakers wanting to establish minteries, the latter is a better option).


Nice effort but I think USDC should be the choice as its already adopted everywhere and would make tez more globally accessible.

I’m curious to see how tzbtc performs too.


Let alone the fact that USDC is not on Tezos yet (nor is there a set date for it, and it was only mentioned as one of the many chains that are going to be part of their expansion) that issue was addressed here under “Why USDtz”:


Not sure if USDC should be liquidity baked…I think, on balance, the protocol should support Tezos natives, not immigrants. (Oh dear, I sound terribly right wing). Whether that is USDtz, KUSD or any of the other newcomers should be decided by vote. Simple as that. Every stakeholder would then be able to voice their opinion and state their position, just like Kevin eloquently did. I would suggest, however, to first check out how liquidity baking works in practice before finding new ones to bake…


Agreed that USDTz would be the logical next choice, from it’s stability to it’s diverse presence throughout the whole tezos ecosystem.


Lets wait first how this experiment with tzbtc plays out?


a stablecoin backed by fiat is subject to regulation rather sooner than later
a stablecoin that can be frozen by an admin is a disaster
we may see it as a trade-off and tolerate the risk and trust Circle to get infinite liquidity/accessibility of usdc for tez
but why do that for a stablecoin backed by a stablecoin backed by fiat

IMO the demand for usdtz becomes zero once usdc is there. Stake and dump plenty is good though
3 mil out of 3.3 mil usdtz is farming plenty if I read the total supply correctly

If we want to subsudize something tezos based instead of fiat based usdc, let’s look at kusd / uusd (haven’t checked you/uusd thoroughly). though usdc on tezos will be pretty much native when it’s deployed


I would rather have a wrapped stablecoin via the wrap protocol, or wwbtc/wweth. Many more people actually have or hold BTC/ETH than they do XTZ or USDtz. We should tap into those holders rather than trying to subsidize liquidity with a coin that uses a CENTRALIZED service for minting the tokens. I think tzbtc is a shit choice also but we didnt really have the options back then that we do now. If liquidity baking is continued after granada, it NEEDS to be using a token that people can get without having go through a damn mintery and send an email to do it.


This kind of transparency and information is key to a successful project. The explanations on the prospective minters, who handles the compliance and administration; wow, just wow. Easy instructions on how to get started from trading on quipuswap, to registering for a mintery. Great job! What a project to follow and watch grow!

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I am for supporting the Youves platform and its uUSD. After a “hard pegged” token like tzBTC, it would be interesting to see how a algorithmic stablecoin like uUSD can profit from this liquidity baking mechanics.

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A scaled FIAT-backed USD stablecoin will not only enable massive growth for algocoins, but enable them to keep a stronger peg with lower stability fees as well. Maintaining the 1-1 peg is the biggest challenge with algocoins. FIAT-backed USD stablecoins are convertible, so market participants are confident in their peg. The peg-maintaining issue for algocoins is largely solved by providing a means to convert algocoins to FIAT-backed USD stablecoins. Market participants need to see that they can convert algocoins to FIAT-backed coins. Literally ‘knowing’ they can convert if they want to, renders higher confidence in the 1-1 algocoin peg.

This can be observed at USDC/ETH is the largest most active pool. The largest pools for DAI and FRAX (algocoins) are not their pairings with ETH, but rather their pairings with USDC (DAI/USDC, FRAX/USDC).

USDtz is a friend to algocoins and a scaled USDtz on Liquidity Baking will pave a golden road for kUSD and uUSD in the future.


Bringing liquidity into the tezos platform requires a token tied to an external asset. This is why tzBTC was picked. This is why USDtz also makes sense.

USDtz will be migrating to a multisig contract soon. The code to do so exists already. As far as unilateral burns are concerned, USDtz is different from most other tokens in that it is issued by a company, this company can be contacted, it can be audited, it can be sued if needed. Multisig is certainly the way to go for other reasons.


Thank you for your efforts and explanations.
I support your proposal and wish you luck.


There is a difference between Primary markets (involves minting), and Secondary markets (involves buying).

The need to ‘mint’ anything at all is actually a reducing proportion of new acquirers of USDtz. As liquidity has been increasing, and as options like TezEx have started to grow, most people now get their USDtz (including very large amounts) from those sources, not from a Mintery.

Eventually, the only people using minteries will be institutions (banks, exchanges, liquidity provider firms) whose demands would outweigh the available liquidity from the other options (of which are increasing as well). Buying USDtz with FIAT through TezEx is a goal that is in sight.

I can also tell you minteries report that they have users who refuse to use any other option and only want to go through a mintery — minting in such large amounts that the trusted relationship they have with minteries is something they refuse to substitute.

“Even for Primary markets, why not just automate it so I don’t have to talk to a human person?”

  • It’s not about the technology (that’s easy, and obvious), it’s about compliance — legal regulatory compliance with respective jurisdictional requirements. That’s why these methods have been devised and are followed. This is the most scalable way.

Also, those base currencies (e.g. USDC), are indeed minted in a fashion that involves emailing and enrolled certain members and institutions — what some would call ‘centralized’ by that definition. Really, look it up. When you get USDC and on Circle and Coinbase, you’re not minting it; you’re buying it from an already minted secondary-market. It’s just that the secondary market already has so much liquidity almost no one needs to mint outside of ultra-whales or institutions.


USDc is most known and reputable in the market. Seems like a logical next one to include.

But an analysis of the fee structure could be nice. What fees apply to mint / burn USDtz?

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Please see other comments and replies in this thread. USDC is not on Tezos yet. It was mentioned in the pile of of one of 10 other blockchains they’re saying they want to go on. Tether is already on a dozen chains and Tezos is not one of them.

From the original post:

For minters there are no fees other than the gas fee. Minteries may have their own fees. People generally shop between different minteries and find their preference. Free-market forces take effect as minteries compete with each other, vying for your business.

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I would support fully the integration into protocol level liquidity baking of USDtez.

Also, if you would like Sebuhnet baker to start liquidity baking you can make a proposal in our DAO.

Currently we are liquidity baking three tokens for the next 30 cycles at 25% of bakers revenue.

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Hello, I would support USDtz too, I guess is better than tzBTC, but I really would prefer to subsidize a stable coin without centralized minters, either an algorithmic type or a collateral type. I don’t think the spirit of blockchain lies in centralized minters.

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There are a couple things to unpack here and I’m glad you brought up “spirit of blockchain.”

FIAT-backed vs Algocoins

Scaling algocoins without providing a conduit for convertibility (i.e. a scaled FIAT-backed stablecoin) would make it unnecessarily difficult to maintain the 1-1 peg of that algocoin. These are the 2 categorically different types of stablecoins but it’s not a rivalry. Rather, they help each other:

FIAT-backed stablecoins are the most stable in practice because they are fully-backed and convertible to a FIAT reserve. Confidence by market participants that they can always convert the FIAT-backed stablecoin back to a parallel collateral is what transitively endows confidence in the stablecoin’s 1-1 peg.

Algorithmic stablecoins are less stable in practice because market participants cannot always have full confidence that the algocoin can be converted back to a collateral amount.

These coins are not necessarily rivals. In fact, they are good friends.

Having a scaled FIAT-backed stablecoin, which will lead to FIAT-backed–Algocoin pools are a great help in maintaining confidence in the algocoin’s 1-1 peg. It’s not about actually converting Algocoins to FIAT-backed coins. Rather, just knowing that that option is there is satisfying enough to 99.99% of market participants.

Therefore, It would be very difficult to maintain the peg of a scaled algocoin without first having a scaled FIAT-backed coin to which the market is confident it can convert the algocoin. If you would like to see an example of how this plays out in the markets, go to

For the Ethereum Algocoins, DAI and FRAX respectively, their largest pools on Uniswap are not their /ETH pools, but rather their pools with FIAT-backed stablecoins. These are larger than their /ETH pools let alone their parings with other tokens because the market needs confidence that they can convert those algocoins for FIAT, and their scaled pairings withFIAT-backed stablecoins (which are convertible to FIAT) by the transitive property, provide that confidence.

So, if you want to see Tezos algocoins scale to exponentially greater heights, it would be extremely helpful to support the growth of FIAT-backed stablecoins first.

USDtz Minteries and Decentralization

Decentralized does not mean anonymous. Lack of anonymous minting does not necessarily mean minting is centralized.

Centralized minting would mean one party has the right to create the coin. For example, the US dollar minting is centralized because only the US Treasury and its respective mints can produce it. These are: Philadelphia Mint, Denver Mint, San Francisco Mint, and West Point Mint. These 4 centrally controlled Mints are the only ones allowed to produce US dollars and US coins.

With USDtz, minting is not centralized. In fact, project creators have not and will not mint for themselves by rule. Minting is done by the community. Yes, one must enroll to be a minter. Yes, KYC must be conducted as part of the AML efforts of the enrollment process. (KYC was/is also part of the verification process prior to the activation of the Tezos token allocations from the crowdsale. In fact, the same KYC/compliance provider is used that had been used for that process for years and from the beginning — TokenSoft)

No, minting cannot be done anonymously. No, not everyone who begins the enrollment process necessarily qualifies. This is done to keep in alignment with developing regulatory standards by respective jurisdictions around the world, and in particular the standards of the United States. This will keep USDtz much more scalable in the long-run. USDT and USDC arguably have much stricter controls.

There are many independent minters and there are 4 active minteries right now and more will continue to be added. These are not owned or controlled by USDtz; they are independent bakers that are part of the Tezos community. These minteries include: Tezsure, XTZ Delegate, Kryptstar, and Canadian Bakin’.

We encourage more qualified bakers to enroll as minteries. As USDtz continues to scale and more jurisdictional qualifications are acquired by the project, more will be able to qualify to enroll as minters. It’s a process that continues to grow. Learning from this process over the past year has enabled us to design a multi-sig that accommodates expected contingencies that wouldn’t have been discovered otherwise. This month, minting will transition to the multi-sig including the community of enrolled minters in the process.

So, not only is USDtz minting not centralized, but stage by stage the project is making minting even more decentralized over time, informed by its own iterative feedback loop.


UPDATE SEPT 29, 2021 The full Hangzhou proposal + Liquidity Baking changed to XTZ-USDtz has been injected

Reiterating some points:

Lower Friction; Less Restrictive
Instead of adding another contract pair to Liquidity Baking, we are proposing a full-replacement of tzBTC with USDtz. tzBTC has not met Liquidity Baking goals with regard to scaling, due largely to the minting restrictions.The Liquidity Baking pool should be 100x larger than it is currently.

There has only been 1 active minter for tzBTC — a single large institution whose fee requirements (0.65% in either buy or sell direction) have made participation very difficult for most investors, and in effect has kept its liquidity low throughout the Tezos DeFi ecosystem.

USDtz is free to mint and redeem for enrolled minters - which can be individuals or institutions (the institutions are preferably bakers), only incurring the cost of gas to send collateral in a redemption. Even minteries (minting as a service) have been known to charge an average of only 0.25% in either direction. It is encouraged that qualifying Bakers in good standing enroll as minteries. The decentralized network of bakers should benefit from these activities, not just institutions, let alone a single institution.

Preferred Denomination
USD is also the preferred denomination for ‘risk free instrument’ seekers, which is along the lines of what Liquidity Baking is meant to provide — a stable low-risk/low-return investment vehicle that would nonetheless provide a backbone of liquidity on which the rest of the Tezos DeFi ecosystem can independently multiply many times over.

USD is also the preferred denomination of XTZ traders, as XTZ-USD is a far more popular pair (by volume) on centralized exchanges and Tezos DEXs than is XTZ-BTC. This indicates XTZ-USDtz will be a much more popular trading pair in terms of actual trading. This is very important as it would make the prospect of completely mitigating the inflation that the Liquidity Baking subsidy provides, much more likely to be achieved (since the 0.1% fee of every transaction is burned).

Subsidy offset
The ‘fee burning’ of Liquidity Baking has been intended to offset the subsidy in part or in full. It is far more likely that USDtz will offset the subsidy in full and beyond.

In fact, this will more likely achieve the long term prospect of removing the subsidy. If the activity demonstrably shows that liquidity providers would make more from fees (that are currently burned) than they would from the subsidy, the subsidy would obviously be not only needless, but restrictive. In other words, XTZ-USDtz for liquidity baking is far more likely to allow Liquidity Baking to ‘outgrow’ the need for a subsidy.

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