USD0 Risk Policy

Principles

At Eclipse AI, we uphold a strong risk management philosophy to ensure the stability and security of USD0, our stablecoin. It is crucial that USD0 remains fully backed by diverse collateral reserves, which helps maintain its 1:1 peg with the US dollar and supports capital preservation for holders. Our commitment to a low-risk profile is central to our strategy.

The foundation of our risk philosophy is based on diversifying our collateral holdings across money market funds and Real World Assets (RWA). This strategy helps mitigate risks associated with any single asset class and enhances the overall stability of USD0.

Our comprehensive risk management practices set us apart from competitors. We have a robust risk policy that includes regular risk assessments, stress testing, and scenario analyses to identify, assess, and mitigate potential risks effectively. We continuously review and update our risk management procedures to ensure they remain effective and relevant.

In the unlikely event that USD0 becomes undercollateralized, our well-funded insurance mechanism is designed to compensate holders, ensuring their interests are protected even under adverse conditions.

In conclusion, this document outlines the rigorous risk management measures we have implemented at Eclipse AI. By adhering to our detailed risk management practices and maintaining a diverse collateral base, we strive to keep USD0 as a low-risk product, preserving its 1:1 peg with the US dollar and protecting capital for holders.