Alto Money Is Live on Ethereum Mainnet

Alto is live on Ethereum mainnet. Alto is a credit and incentives protocol built around its native stablecoin, DUSD. It is designed to enable users to deploy supported collateral for borrowing, lending, and minting DUSD within a framework that incorporates protocol-level safeguards, while acknowledging that all digital asset activity involves material risks.

DUSD sits at the center of the system as the only borrowable asset, while activity is split across isolated markets with their own parameters and risk controls. This keeps risk compartmentalized and makes accounting and capital flows across the protocol simpler and more transparent.

---

Guarded Launch

Alto is launching in a guarded state. The protocol starts with conservative ceilings on how much DUSD can be minted and how large positions can be in each minting pathway. These limits are designed to monitor how the system behaves under live conditions, keep the economic model balanced, and scale supply and risk in a controlled manner.

At launch, three core components are live:

1. Mint Markets allow users to create new DUSD directly against specific collateral types.

   • Supported assets: WETH, wstETH, rETH, mETH, and tBTC.

   • Mechanism: Users mint DUSD up to a defined Debt Ceiling per market.

   • Interest model: Fixed rate

     Minting Collateral	DUSD Minting Interest Rate
     ETH	2%
     LSTs	2.5%
     tBTC	2.5%

2. Borrow Markets function as lending pools where users supply DUSD to earn yield, while others borrow it against their collateral.

   • Supported assets: WBTC, cbBTC, and sUSDe.
   • Mechanism: Lenders supply DUSD; borrowers draw from the pool.
   • Interest model: Adaptive curve. Unlike Mint Markets, interest rates here are dynamic. They adjust based on capital utilization, targeting an optimal rate at 90% utilization.

3. Peg Stability Module (PSM) ensures DUSD stability by allowing 1:1 swaps with USDC (minus a 0.20% fee). It provides a reliable on/off-ramp for liquidity and arbitrage.

Initial Parameters

Core Element	Collateral Asset	Debt Ceiling
Mint Markets	ETH / LSTs / tBTC	$1.6M
PSM	USDC	$5M
Borrow Markets	WBTC / cbBTC / sUSDe	No Ceiling1

---

Alto Reward Options (ARO)

Alto introduces a unique rewards mechanism: Alto Reward Options (ARO). Instead of receiving free tokens, eligible users earn call options on the ALTO token. ARO grants the holder the right to purchase ALTO at a discount relative to the market price.

To bootstrap demand for DUSD, only borrowers in Borrow Markets will accrue ARO rewards at launch. Lenders and minters do not receive ARO initially, but benefit from the organic yield generated by the incentivised borrowing demand.

---

Example Configurations

With ARO incentives focused purely on borrowers, it is useful to highlight a few example ways users might combine Alto’s components. These are illustrations of how the system can be used, not recommendations, and may not be suitable for all users.

1. The “Carry” Between Mint and Borrow Markets

A user can mint DUSD in a Mint Market (for example, against wstETH at a fixed 2.5% rate) and then lend that DUSD into a Borrow Market such as the WBTC market. If borrowing demand is strong while ARO incentives are active, utilization in Borrow Markets may rise and with it the variable lending rate. In that case, the user earns a positive spread between the fixed minting cost and the floating lending yield, while maintaining their underlying ETH exposure.

Risks: key risks include rate mismatch (the lending rate falling below the fixed minting rate), ongoing exposure to collateral price movements, and the possibility of liquidation if collateral value drops or if protocol risk parameters are updated. Users should expect that adverse rate or price conditions may materially impact their positions.

2. The ARO-Focused Borrower

A user who wants to focus on ARO can supply collateral (WBTC, cbBTC, or sUSDe) to a Borrow Market and borrow DUSD against it. Because borrowing is the only incentivized action at launch, these users receive the full stream of ARO incentives for that market. If ALTO trades above the ARO strike, the value of accrued options can materially reduce the effective cost of borrowing and, in some market conditions, more than offset interest and fees so that the user is effectively “paid to borrow.” However, this outcome is uncertain and depends on market pricing, liquidity, and timing.

Risks: the position is exposed to liquidation if collateral value falls or debt rises relative to collateral, and ARO has uncertain value: ALTO may be volatile or illiquid, and options can expire worthless, while interest and fees on the debt are realized costs.

3. The DUSD Liquidity Provider**

A user holding USDC who does not want to manage collateral positions can source liquidity through the Peg Stability Module or the LP: swap USDC for DUSD and lend DUSD into Borrow Markets. This provides a straightforward way to gain exposure to lending APYs that may be elevated when borrowing demand is strong, without taking direct price exposure to volatile collateral assets. In the guarded launch, these users earn lending APY only; ARO emissions are reserved for borrowers, which helps keep utilization and rates supported.

Risks: users are exposed to DUSD and PSM risk (including peg stability and capacity constraints), smart-contract and protocol risk, and liquidity risk if exit routes (Borrow Markets or the PSM) are impaired or capacity-limited.

---

A Modular Credit Layer for DUSD

Alto’s launch marks the beginning of a modular credit layer where risk is isolated, but capital is efficient. By offering competitive fixed rates for minters and incentivized adaptive rates for borrowers, Alto creates a symbiotic ecosystem where every participant, whether seeking yield, leverage, or governance power, has a role to play.

Interest from Mint Markets and opening fees flow to ALTO stakers, while ARO exercises fund a growing treasury of protocol-owned liquidity, aligning long-term governance power with the protocol’s own balance sheet.

The protocol is now live on Ethereum mainnet. Enter the app at app.alto.money to mint, borrow, and earn.

Footnotes

1. Borrow Markets don't have a DUSD supply ceiling because total DUSD is already limited upstream by Mint Markets and the PSM. ↩