USD.AI: An Overview

USD.AI is a DeFi protocol that issues a synthetic dollar known as USDai, intended to underwrite financing for physical infrastructure in the artificial intelligence industry. Built by Permian Labs, the system operates as a high-yield credit platform that extends hardware-collateralized loans to emerging AI firms, a segment the team calls "Infrastructure Finance" or "InfraFi."

Overview

The protocol was developed to fill a financing gap for nascent AI firms that own valuable physical hardware—such as GPUs—but lack access to traditional credit. It permits these companies to put compute hardware on-chain as collateral to obtain non-dilutive credit. By treating in-demand compute as a commoditized asset, USD.AI supports an automated, on-chain approval workflow intended to shorten loan execution times from months to under a week.

For depositors, the platform provides asset-backed yield that is paid from interest on these hardware-secured loans. The stack is composed of "stackable DeFi primitives," modular elements built to cover the lifecycle of asset-backed lending, from yield extraction and risk curation to liquidity handling. This design is an iteration on the earlier MetaStreet protocol and deliberately avoids dependence on external price oracles, making it suitable for assets with infrequent mark-to-market, including real-world assets (RWAs) and decentralized physical infrastructure networks (DePIN).

The mission the team describes is widening capital access for AI builders. David Choi, co-founder of USD.AI, said, "Not everyone has a CFO or a Wall Street connection. But they do have machines and a future to build. This is a dollar that scales for the outsiders." Vance Spencer of Framework Ventures, a lead investor, likened AI’s capital needs to an "oil boom," adding that USD.AI could "democratize access to funding while offering investors yield tied to AI sector growth."

History

USD.AI’s technical base traces back to the MetaStreet protocol, with its core modules developed and released in stages across 2023 and 2024. Early building blocks included an Automatic Tranche Maker (ATM) for oracleless lending, a Liquid Credit Token (LCT) to enable trading of debt positions, and a Yield Pass for separating yield from illiquid assets.

The project accelerated in 2025. During a private beta, it collected $50 million in deposits. On August 14, 2025, Permian Labs disclosed a $13 million Series A raise led by Framework Ventures, joined by investors including Dragonfly and Arbitrum. Shortly thereafter, on August 26, YZi Labs (formerly Binance Labs) announced a strategic investment in the protocol.

The protocol’s Total Value Locked (TVL) grew rapidly, moving from near zero in early June 2025 to more than $62.7 million by late August 2025. In September 2025, USD.AI hit major deposit thresholds: it filled an initial $250 million deposit cap and then a second $250 million cap by September 11, bringing aggregate deposits to $500 million. On September 19, the team announced a new deposit round to increase the total limit by another $500 million, with a portion reserved for strategic partner Plasma.

Technology

USD.AI is built on a modular architecture meant to handle lending against illiquid, real-world collateral. That design centers on three principal pillars and a set of interoperable, "stackable" components.

The protocol’s operations are split into three core systems that together manage the full lifecycle of asset-backed credit.

These three pillars are implemented through several distinct, composable mechanisms, each addressing a specific operational need:

• CALIBER [Yield]: The legal and technical apparatus for tokenizing physical assets and producing yield. It supports oracleless lending, enables the separation of yield from principal, and maintains an on-chain insurance fund held on the company’s balance sheet and backed by Treasury bills to guard against catastrophic losses.
• FiLo Curator [Scale]: A system engineered to onboard real-world infrastructure loans at scale, providing risk curation and vetting so new asset-backed loans can be opened to public capital while preserving structural protections for the protocol.
• QEV [Redeem]: A decentralized liquidity primitive that manages redemptions for a liquid token backed by long-dated, illiquid collateral. Rather than using a simple first-in, first-out queue, QEV applies a market-driven method to handle redemption requests transparently and equitably.
• Automatic Tranche Maker (ATM): An oracleless lending module that enables credit for low-liquidity assets such as NFTs and RWAs.
• Liquid Credit Token (LCT): A tradable, yield-bearing instrument that represents a user’s stake in a credit tranche.
• ObjectSDK: A modular underwriting toolkit used for appraising assets and producing amortization schedules for RWAs and DePIN hardware.
• Yield Pass: A mechanism that separates and isolates yield from productive yet illiquid assets.
• QEV-Boost: A liquidity incentive layer that implements auctions to grant prioritized access within the redemption queue, optimizing allocation of liquidity.

Tokenomics

USD.AI uses a dual-token structure to distinguish between liquidity provision and yield capture, enabling both a stable, liquid medium and a higher-yield, less liquid claim.

USDai is the protocol’s synthetic dollar. Unlike fiat-collateralized stablecoins such as USDC or USDT, USDai is a fully backed synthetic asset intended for deep liquidity and instant redemption. Its primary backing is the $M token of the M0 Protocol, which in turn is backed by U.S. Treasury Bills. Users mint USDai by depositing supported stablecoins that the protocol swaps into $M. USDai functions as the main on- and off-ramp for the ecosystem and does not itself accrue yield.

sUSDai (Staked USDai) is the protocol’s yield-bearing instrument. Depositors receive sUSDai when they stake USDai into the protocol vault. sUSDai is an ERC-4626–compliant, free-floating token whose value denotes a share of the protocol’s net assets, including idle capital and active lending positions. Yield for sUSDai comes from emissions tied to the underlying $M tokens and interest earned by deploying capital into lending pools on the MetaStreet protocol. Because sUSDai is backed by illiquid loans, redemptions proceed through a timed process.

Ecosystem and Partnerships

USD.AI has assembled an ecosystem of borrowers, investors, and DeFi partners to support its InfraFi vision.

• Borrowers: Notable borrowers that have used the protocol for hardware financing include Lyceum, Hydra Host, Compute Labs, and TACOM.
• DeFi Integrations: The protocol has integrated with multiple DeFi platforms to expand yield and functionality. It partners with Pendle Finance to offer "Boost" and "Max" yield strategies. A strategic relationship with the Plasma Foundation helps drive ecosystem growth and user incentives. The team also built "AutoVaults" in collaboration with K3 Capital, Concrete, and Euler to deliver optimized yields to depositors.
• Infrastructure Partners: The M0 Protocol supplies the T-Bill–backed $M token used as collateral for USDai, and MetaStreet’s lending pools are a primary outlet for deploying capital to generate yield. Chainlink price feeds are used to value lending positions, and Uniswap V3 is employed for internal asset swaps.