Origin Dollar (OUSD), launched in 2020, is a yield-bearing stable-coin developed on the Ethereum blockchain. As a cryptocurrency token, it is designed to maintain a stable value, pegged approximately 1:1 to the U.S. dollar. Its distinguishing feature is its ability to generate a passive yield directly in a user's cryptocurrency wallet without requiring active management, staking, or lock-up periods. OUSD was created by Origin Protocol (OGN), a team focused on developing a suite of decentralized finance (DeFi) products to increase economic opportunity^[1][7].

Overview

Origin Dollar operates as a self-custodial, yield-bearing stablecoin on the Ethereum blockchain, engineered to maintain a value close to one U.S. dollar. This peg is achieved indirectly; instead of being backed by fiat currency held in a bank, OUSD is fully collateralized by a basket of other prominent stablecoins, such as USDT, USDC, and USDS (formerly Dai). This 1:1 collateralization, held in on-chain smart contracts, allows arbitrageurs to mint or redeem OUSD, ensuring its market price remains tightly coupled to the $1 peg^[8].

A key innovation of OUSD is its native yield generation, which solves the dilemma of stablecoin holders having to choose between liquidity and yield. Unlike traditional stablecoins that require users to lend or stake them on other platforms, OUSD automates this process. The underlying collateral is deployed into a diversified set of DeFi protocols to earn yields, which are then distributed back to OUSD holders through an increase in their wallet balance via a rebase mechanism^[7]. Following the success of this model, the Origin Protocol team developed a similar yield-bearing asset pegged to the value of Ether, known as Origin Ether (OETH), as well as Super OETH and OS for the Sonic network^[4]​^[9].

Tokenomics

OUSD is an ERC-20 token on the Ethereum blockchain, ensuring compatibility with the broader Ethereum ecosystem of wallets, decentralized applications (dApps), and exchanges. As of November 2025, the circulating supply is approximately 9.59 million OUSD, corresponding to a market capitalization of around $9.58 million^[5]​^[6]. The token is accessible for trading on both centralized exchanges like Coinbase and decentralized exchanges (DEXs) like Uniswap. It can also be acquired directly through the official Origin DApp. As a standard ERC-20 token, OUSD can be held in any wallet that supports Ethereum-based assets, including popular options like MetaMask, Trust Wallet, and Coinbase Wallet^[3]​^[9].

Elastic Supply

OUSD utilizes an elastic supply mechanism, a concept inspired by protocols like Ampleforth, to distribute yield. Unlike fixed-supply assets where value appreciation is reflected in price, OUSD's price remains stable at approximately $1. Instead, the yield generated by the protocol's underlying assets is distributed to holders through an increase in the total supply of OUSD. This process, known as a "rebase," is handled by smart contracts that automatically adjust the balance of OUSD in every holder's wallet to reflect their share of the earned yield. Rebases occur multiple times per day and are triggered by minting and redemption activity within the protocol^[2][9].

While inspired by Ampleforth's rebasing model, OUSD's implementation has several key differences:

• Collateralization: OUSD is 100% backed by a portfolio of other stablecoins. This full collateralisation provides a strong foundation for its $1 peg, which is further maintained by arbitrageurs who can profitably mint or redeem OUSD when its market price deviates. This contrasts with purely algorithmic models that may struggle to maintain their peg during market volatility.
• Positive Rebasing: OUSD is designed to be a positive-rebase-only system. The supply should only increase, as rebases are funded by a share of the actual, realised yield from the protocol's strategies. A user's principal is intended to be protected, and any negative rebase (a decrease in wallet balance) would indicate a loss of underlying collateral due to a critical failure in one of the integrated protocols.
• Rebase Frequency: Unlike Ampleforth's daily rebase schedule, OUSD's token supply adjusts multiple times per day as yield is accrued, providing a smoother and more continuous distribution of earnings.

Yield Generation

The yield distributed to OUSD holders is generated through a multi-faceted strategy managed by the OUSD Vault smart contract. This vault pools the underlying collateral—composed of stablecoins like USDC, USDT, and USDS—and allocates it across a diversified set of audited yield-generating strategies. During the March 2023 depegging of USDC and DAI (now USDS), the protocol's risk management systems reportedly performed as designed, protecting the vault and maintaining a superior peg while generating profits from the market volatility^[8].

Yield Sources

The protocol employs several core strategies to generate returns:

• Lending: Collateral is lent on over-collateralized money markets. The protocol utilizes top-tier, audited platforms like Aave and specialised vaults such as the Steakhouse USDC vault on Morpho, which is noted for its institutional-grade risk management.
• Market Making: The protocol provides liquidity to automated market makers (AMMs) for stablecoin-to-stablecoin trading pairs. This strategy earns trading fees while largely mitigating the risk of impermanent loss.
• Rewards Harvesting: The protocol automatically claims and liquidates bonus incentive tokens (e.g., CRV from Curve, COMP from Compound) distributed by other DeFi protocols. These rewards are converted into OUSD and distributed to holders.

Yield Amplification

OUSD's design includes several mechanics that amplify the APY for holders:

• Protocol-Owned Liquidity: Capital held in certain smart contracts (e.g., some AMM pools) does not receive yield via rebasing. However, the underlying collateral is still used to generate yield, which is then distributed among all other OUSD holders.
• Exit Fee Recycling: Fees from protocol exits are redirected back to the pool, rewarding long-term holders.
• Strategy Diversification: By spreading capital across multiple strategies, the protocol avoids the yield compression that occurs when large amounts of capital flood a single opportunity.
• Algorithmic Market Operations (AMO): AMOs are smart contracts that automate the protocol's monetary policy. They can mint and deploy OUSD into liquidity pools or lending markets under predefined conditions, allowing the protocol to earn additional rewards on its capital and manage liquidity efficiently^[8][9].

Automated Redemption Manager (ARM)

The Automated Redemption Manager (ARM) is a liquidity management framework developed by Origin Protocol to reinforce the peg stability of Liquid Staking Tokens (LSTs) and generate yield. The ARM operates through a dual mechanism: it performs arbitrage when an LST trades at a discount to its underlying asset, and it lends out its capital to earn interest when arbitrage opportunities are not present^[10].

The ARM system has been implemented for Lido's stETH on Ethereum, in a deployment supported by the Lido Ecosystem Foundation, and for OS, the native LST of the Sonic network. When not performing arbitrage, the stETH ARM routes capital to the Morpho lending protocol, while the OS ARM routes capital to Silo. All fees generated from the ARM's arbitrage and lending activities are used to purchase OGN tokens on the open market, with the acquired OGN distributed to xOGN stakers, creating a direct value accrual mechanism for OGN holders^[10].

OGN Staking and Governance

Origin Protocol's governance and value accrual are centered around its native token, OGN, through a vote-escrow staking model. Users can lock OGN for a period ranging from 30 days to one year to receive xOGN. The amount of xOGN received is weighted by the lock-up duration, with a one-year lock receiving a significant multiplier compared to a 30-day lock. This system is designed to reward long-term token holders^[11].

While inspired by Curve's veCRV model, OGN staking has key differences. A user's xOGN balance remains constant throughout their lock-up period, whereas a veCRV balance decays over time. The OGN system also allows users to create multiple distinct stakes from a single wallet and natively supports vote delegation, enhancing flexibility and security. A primary incentive for staking is that 100% of the protocol's revenue, generated from products like OUSD, OETH, and the ARM, is used for OGN buybacks and distributed to xOGN holders^[11].

Technical Development and Security

OUSD's smart contracts are open-source under an MIT License, and the project has undergone multiple security audits from firms including OpenZeppelin. A key part of its development process involves running simulations in a "forked mode," allowing developers to test new code against a real-time copy of the Ethereum mainnet state^[4].

In November 2025, the protocol executed a major upgrade to its sister product, OETH, which often trials new technologies. This upgrade overhauled OETH's staking architecture by consolidating from approximately 1,000 "sweeping" validators to 15 "compounding" validators. This change increased capital efficiency and enabled faster withdrawals by removing a 9–10 day sweeping cycle. The upgrade also introduced Distributed Validator Technology (DVT) via the SSV Network to improve validator resilience and decentralization^[12][9].

The most significant innovation in this upgrade was the shift to "fully trustless accounting" by eliminating reliance on oracles. Leveraging the EIP-4788 feature from Ethereum’s Dencun upgrade, OETH's smart contracts can now use Merkle proofs to cryptographically verify validator balances and statuses directly against the Beacon Chain's state. This trust-minimized approach, also pioneered by protocols like EigenLayer, distinguishes OETH from LSTs that rely on trusted oracle committees. The upgraded contracts were audited by OpenZeppelin, Sigma Prime, and Nethermind. In February 2025, Origin Protocol also received an OP Grant from Optimism, signaling its strategic expansion into the Layer-2 ecosystem^[13][4].