# Web3 Dollar

> Web3 Dollar (USD3) is a yield-bearing, USD-denominated stablecoin on the Reserve protocol. It is backed by a diversified basket of interest-bearing stablecoin p...

- Canonical URL: https://iq.wiki/wiki/web3-dollar
- Categories: Cryptoassets
- Tags: Infrastructure
- Created: 2025-12-15T20:09:43.832Z
- Last updated: 2025-12-21T18:20:55.998Z
- Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki)

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**Web3 Dollar (USD3)** is a yield-bearing, USD-denominated [stablecoin](https://iq.wiki/wiki/stablecoin) that operates on the [Reserve](https://iq.wiki/wiki/reserve) protocol. Structured as a Decentralized Token Folio (DTF), it is fully backed by a diversified portfolio of interest-bearing [stablecoin](https://iq.wiki/wiki/stablecoin) positions derived from overcollateralized [decentralized finance (DeFi)](https://iq.wiki/wiki/defi) protocols. USD3 is designed to maintain a value pegged to the U.S. dollar while passively generating and distributing yield to its holders. [\[1\]](#cite-id-RwSstxcOHCUW2BS7) [\[5\]](#cite-id-yoPEsxj4cB7wDiej) 

## Overview

Web3 Dollar (USD3) is a yield-bearing, USD-denominated [stablecoin](https://iq.wiki/wiki/stablecoin) implemented as a Decentralized Token Folio within the [Reserve](https://iq.wiki/wiki/reserve) protocol. It is fully collateralized on a one-to-one basis by a diversified basket of interest-bearing [stablecoin](https://iq.wiki/wiki/stablecoin) positions deployed across overcollateralized [decentralized finance](https://iq.wiki/wiki/defi) lending markets. The underlying [collateral](https://iq.wiki/wiki/collateral) consists of yield-generating [stablecoin](https://iq.wiki/wiki/stablecoin) assets, and the aggregate yield produced by these positions accrues automatically at the protocol level and is reflected in the token’s redeemable value while maintaining a U.S. dollar reference. USD3 aggregates exposure to multiple [DeFi](https://iq.wiki/wiki/defi) lending venues into a single onchain token, removing the need for holders to manage individual lending, borrowing, or rebalancing activities. [Collateral](https://iq.wiki/wiki/collateral) composition, revenue allocation, and risk parameters are governed onchain through the [Reserve](https://iq.wiki/wiki/reserve) protocol, with predefined mechanisms for harvesting yield, managing surplus, and responding to changes in market conditions. The structure is designed to provide transparent, continuously accruing USD-denominated yield through a liquid, onchain asset that can be minted, redeemed, and used within [decentralized finance](https://iq.wiki/wiki/defi) applications. [\[3\]](#cite-id-nrxyaSurIdgpgkxo) [\[5\]](#cite-id-yoPEsxj4cB7wDiej) 

[YOUTUBE@VID](https://youtube.com/watch?v=3OQuuHyonqg)