Overview
1. What is Confederate Reserve?
Confederate Reserve is a decentralized monetary system that issues dollar-pegged state currencies backed 1:1 by USDC held in audited smart contracts. Each state token represents a programmable claim on a specific tranche of the reserve. The protocol exposes three primitives: mint, trade, and redeem.
Mechanics
2. Minting a state token
Depositing 1 USDC mints 1 unit of the chosen state token, minus a 10 bps protocol fee. The deposit is routed into on-chain yield strategies managed by the reserve. Balances and strategies are queryable on-chain at any time.
POST /api/deposit
{
"walletAddress": "0x…",
"amount": 10000.00
}Collateral
3. Reserve ratio
The protocol targets a 130% reserve ratio: for every $1 of state tokens in circulation, $1.30 of USDC is held in reserve. If the ratio drops below 115%, new mints are paused until the buffer is restored. Redemptions remain available at all times.
Exit
4. Redeeming to USDC
Any state token can be burned for USDC at any time, minus a 20 bps settlement fee. Settlement is atomic and non-custodial — USDC is released directly to the signing wallet.
Liquidity
5. Trading across states
State tokens trade on aggregated DEX liquidity (Uniswap v4, Raydium). The in-app router finds best execution, accounts for slippage, and simulates output before signing.
Trust assumptions
6. Security model
- Non-custodial: the protocol never holds user keys.
- On-chain attestation: third-party hashes anchor the quarterly audit.
- Liquidation buffer: reserves maintained above the 115% floor at all times.
- Open source: contracts and UI are public, auditable, and pinned.