Reserves and vaults
Follow the backing, understand yield, and know what happens after a loss.
Where the USDG goes
Mint → shared reserve → lending market. Minting creates branded tokens and supplies the deposited USDG to the yield strategy in the same transaction. If the lending strategy cannot accept the deposit, the mint fails; it does not leave you with unbacked tokens.
The current Robinhood strategy supplies USDG directly to Morpho Blue, in a lending market with USDe collateral. Borrowers pay interest; the reserve is the lender. This is not a deposit into a separate Morpho vault product, and the interest rate is variable.
| Component | Job |
|---|---|
| Shared reserve | Accounts for backing and the supply of each brand. |
| Yield adapter | Supplies USDG to lending and recalls it for withdrawals. |
| Brand treasury | Claims the yield attributed to its brand. |
| Market fee vault | Splits that income between configured recipients. |
How brands share yield
Yield is allocated by each brand's outstanding supply over time. If two brands maintain 75% and 25% of supply throughout an earning period, they receive approximately those shares of its yield, before fees and rounding.
A token held in a trading pool still counts as outstanding. Its backing can therefore earn yield while the token provides market liquidity. Buying the branded token does not give its holder a personal yield claim.
Principal comes before distributions
The reserve separates deposited backing from earned income. It records losses and uses subsequent recovery to offset them before crediting new yield. Yield claims are capped at assets above outstanding token liabilities; an unpaid entitlement remains owed.
That accounting does not insure the reserve. Withdrawals require USDG to be available or recalled from lending. A lending loss can reduce backing, while high borrowing utilization can make withdrawals fail. See redemption limits and income distribution.