Frequently asked questions

Alto is a credit and incentives protocol built around its native stablecoin, DUSD. It turns idle collateral into productive capital by allowing users to borrow, lend, and mint DUSD within isolated markets. Each market is self-contained, which means risk and parameters are independent, keeping the system resilient and capital-efficient.

DUSD is Alto’s native USD-pegged stablecoin and the only asset used for borrowing and lending across all markets. In Borrow Markets, DUSD is supplied by lenders and borrowed by users posting collateral. In Mint Markets, DUSD is newly created against collateral within a debt ceiling. Inside the protocol, DUSD is always treated as 1 USD for risk and accounting purposes.

Borrow Markets allow users to lend or borrow existing DUSD. Lenders earn interest from borrowers, and borrowing capacity depends on available liquidity. Mint Markets let users mint new DUSD directly against their collateral up to a predefined debt ceiling. Protocol fees and mint interest are collected according to the contracts' configuration. Both market types use the same liquidation and risk models for consistency.

Each market is isolated to prevent contagion across the system. If a position becomes undercollateralized, Alto performs partial liquidations - selling only what’s needed to restore a safe loan-to-value (LTV). The Dynamic Close Factor (DCF) and Dynamic Liquidator Bonus (DLB) adjust liquidation behavior to minimize losses and reward timely liquidators, maintaining market health and solvency.

ALTO is the planned protocol governance token. Token-holder governance is not yet operative. Any future allocation of protocol fees to ALTO staking requires a separate decision and may change. Holding or staking ALTO does not guarantee a payment or rate of return.

sDUSD is a vault share token redeemable for DUSD at the smart contract's exchange rate. The rate may change, may remain unchanged for extended periods and is not guaranteed. Access is subject to the app operator's eligibility requirements. New deposits are not offered to persons located in, incorporated in or habitually resident in the EEA or the UK. Existing EEA holders may use withdrawal-only features, subject to contract conditions and the operator's other restrictions. Review the sDUSD risk disclosure and the app Terms of Use.

Active users earn Alto Reward Options (ARO) - non-transferable options that let you purchase ALTO at a discounted price. Borrowing, lending, or minting DUSD generates AROs proportional to your interest activity. Discounts can be boosted by staking ALTO or via referral adapters. Exercising AROs uses DUSD or USDC, and payments flow to the Alto Treasury to sustain long-term growth.

Protocol configuration, upgrades and role changes are currently controlled by the Owner Safe through the Timelock, with separate emergency pause controls. Token-holder DAO governance is not yet operative. Any transition to token-holder governance is subject to a separate decision and implementation.

Fees depend on the market type:

• Borrow opening fees and the protocol share of borrow interest
• Mint-market fees and interest
• Lending-vault performance fees, PSM fees and flash-mint fees
• Liquidation collateral proceeds after conversion by Treasury

Borrow-market lenders receive borrower interest net of the protocol fee. Protocol fees are routed through the ProtocolFeeCollector according to contract configuration. Fee allocation can change and does not guarantee any payment to ALTO holders.