[TEMP CHECK] Onboard USSD to Aave V3 Sonic Instance

Governance General
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[TEMP CHECK] Onboard USSD to Aave V3 Sonic Instance

Author: ACI

Date: 2026-03-19

Simple Summary

The current proposal is set to onboard Sonic stablecoin USSD to Aave V3 Sonic Instance.

USSD will enable users to supply USSD for yield and use it as a stable borrowing mechanism.

Motivation

USSD is Sonic’s network-integrated USD stablecoin designed to become the key source of stable liquidity across the Sonic ecosystem, built on Frax’s frxUSD infrastructure.

USSD is backed 1:1 by high-quality USD assets and can be redeemed back to USDC on any CCTP-supported chains, providing a familiar and reliable on and off-ramp. Using Layer Zero interoperability, USSD enables users to mint USSD from over 10+ chains directly to Sonic.

Reserves consist of short-duration, tokenized U.S. Treasury products, including BlackRock’s BUIDL, Superstate’s USTB, and WisdomTree’s WTGXX, custodied with regulated providers to support redemption confidence and regulatory alignment.

Technical details:

USSD is minted through non-custodial smart contracts at a 1:1 ratio with no minting fees.

Supported mint assets include:

  • Stablecoins: USDC, USDT, PYUSD, USDB
  • Tokenized Treasuries: BUIDL, USTB, WTGXX, and other approved USD/Treasury representations
  • Peg: 1:1 USD
  • Reserve Composition: Tokenized short-duration U.S. Treasury instruments:
    • BlackRock USD Institutional Digital Liquidity Fund (BUIDL)
    • Superstate Short Duration U.S. Government Securities Fund (USTB)
    • WisdomTree Government Money Market Digital Fund (WTGXX)
  • Minting: Zero-fee, non-custodial smart contracts on Sonic
  • Collateral Types: USDC, USDT, PYUSD, USDB, BUIDL, USTB, WTGXX, and others at 1:1 ratio
  • Custodians: Regulated institutional custodians
  • Contract Address (Sonic): https://sonicscan.org/token/0x000000000eccff26b795f73fb0a70d48da657fef

Specification

Risk Parameters will be provided by Risk Service Providers and proposal will be updated accordingly at ARFC stage.

Useful Links:

Next Steps

  1. Publication of TEMP CHECK to gather community & service providers feedback, and escalate to TEMP CHECK Snapshot.
  2. Publication of a standard ARFC, if TEMP CHECK Snapshot passed, to continue collecting community & service providers feedback before escalating proposal to ARFC snapshot stage.
  3. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal.

Disclaimer

The current proposal is powered by Skwyards. ACI is not compensated for creating this proposal.

Copyright

Copyright and related rights waived via CC0

2 Likes
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Author: Sonic Labs

Summary:
Sonic Labs proposes leveraging the Aave Merit programme to bootstrap and sustain USSD lending activity on Aave. The proposal introduces a dual-incentive stricture for USSD lenders:

Incentives
Guaranteed 75% of the 3 month t-bill rate —> funded by passing through the underlying T-bill yield generated by USSD reserves directly to USSD net lenders on Aave.

Additional incentive budget up to 4,000,000 $S token —> distributed as supplementary Merit rewards to USSD lenders over the campaign period.

Incentive Renewal:
Renewal of the $S incentive budget would be based on USSD growth and community feedback.

2 Likes
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The current proposal has been escalated to Temp Check Snapshot.

Vote will start tomorrow, we encourage everyone to participate.

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With approval from Sonic Labs, we have raised the TEMP CHECK to Onboard USSD to Aave V3 Sonic Instance to Snapshot. Voting will begin in 24 hours. You may vote here.

1 Like