Indigo Proposes USDrf Swaps for iUSD

A proposal published on October 2 asks the Indigo DAO to approve RealFi’s dollar stablecoin as PSM collateral. The integration would connect the recently launched RealFi protocol with Indigo’s synthetic dollar through a smart contract on Cardano.

Indigo PSM Swaps and Fees

Indigo is a decentralized synthetic assets protocol. Its iUSD tracks the U.S. dollar and can be obtained through collateralized loans, market purchases, or the Peg Stabilization Module, introduced in Indigo V3.

Through the PSM, users deposit an approved asset to mint the synthetic dollar. Redeeming reverses that process: the synthetic tokens are burned and collateral is returned from the module’s reserves. This creates an arbitrage route when the synthetic asset moves away from its target value.

The proposed pair would exchange tokens at 1:1 before a 0.5% minting fee or a 1% redemption fee, deducted from the output. The fixed ratio removes swap slippage.

The proposal deliberately sets a higher redemption fee to discourage short-term arbitrage from draining reserves and favor minting. Fees would flow to the DAO treasury.

RealFi Collateral on Cardano

RealFi launched on Cardano mainnet on October 1. Its base stablecoin serves payments, trading, and collateral uses, while a separate staked token provides exposure to reserve income.

RealFi describes a reserve portfolio anchored by U.S. Treasury bills and tokenized government money market funds, alongside liquid floating-rate credit and short-term, senior-secured private credit.

Adding its stablecoin to the PSM would create another reserve asset for Indigo’s synthetic dollar. Both tokens are native to Cardano, so the proposed exchange route would not require a cross-chain bridge.

DAO Review and Reserve Controls

The document is listed as a discussion item on Clarity. Indigo’s governance framework gives the DAO authority to approve PSM pairs, adjust fees, and suspend minting or redemption.

PSM redemptions would be limited to the RealFi tokens held by the module. Direct redemption with RealFi’s issuer follows a separate process restricted to approved institutional participants; retail exits depend on decentralized exchange liquidity.

The published proposal leaves sections on redemption access, reserve attestations, and audits without detailed supporting information.

Its removal criteria include a prolonged loss of the dollar peg, discontinued reserve attestations, materially impaired backing, or legal action affecting redemptions. These provisions would give the DAO grounds to pause or remove the pair as the collateral’s condition changes.