> For the complete documentation index, see [llms.txt](https://docs.virtue.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.virtue.money/overview/what-is-vusd.md).

# What is VUSD?

VUSD is a decentralized, over-collateralized stablecoin issued by the Virtue protocol on IOTA.

It is pegged to the US Dollar and backed by on-chain assets such as $IOTA and $stIOTA, ensuring transparency, capital efficiency, and strong price stability.

**Key characteristics of VUSD**

* Fully backed by on-chain collateral
* Cannot be under-collateralized
* Trustless, censorship-resistant, and always redeemable via CDP repayment
* Plays a central role in Virtue’s ecosystem (borrowing, liquidations and more)

By minting and using VUSD, users can retain exposure to IOTA ecosystem assets while unlocking stablecoin liquidity for additional yield strategies.