Whitepaper

LUSD — LIFE USD

Whitepaper v1.0 — Public Version

0. Executive Summary

LUSD is a stablecoin pegged 1:1 to the USD. 1 LUSD = 1 USD. Reserves are held in UAE banks; minting and redemption occur at a 1:1 rate after KYC/KYB and AML verification. The project is built in a neutral jurisdiction, focusing on practical B2B and B2C use cases such as payments, e-commerce, and cross-border trade. LUSD provides direct communication with the issuer and anti-fraud mechanisms (freeze/unfreeze under UAE law). A key focus is the legal payment of export-import contracts in cryptocurrency (guides and document flow) without bypassing compliance.

1. Mission and Principles

- Reliability by default: 100% reserve in USD within UAE banks.

- Jurisdictional neutrality: not tied to U.S. Treasuries or political exposure; reserves fully in UAE.

- Pragmatic compliance: KYC/KYB/AML, sanctions and geo-restrictions.

- Operational responsiveness: users can contact the issuer quickly and request asset freeze in confirmed fraud cases.

- Transparency: monthly Proof-of-Reserves reports and a public dashboard.

2. Peg Model and Tokenomics

Peg: 1 LUSD = 1 USD.

Reserves: 100% cash or cash equivalents held in UAE bank accounts. No exposure to

U.S. debt instruments.

Seigniorage: none; project revenue consists of operational and service fees.

Supply: elastic; mint/burn processes reflect fiat/crypto inflows and outflows (see §3).

3. Minting and Redemption

Minting LUSD:

a. For fiat (USD): bank transfer/cash → KYC/KYB → USD credited → mint 1:1.

b. For crypto: USDT/USDC etc. → AML screening → conversion → mint 1:1.

Redeeming LUSD:

1 LUSD → 1 USD to client’s bank account (after KYC/KYB/AML checks).

Redemption Policy: published separately (windows, limits, fees, priorities in stress scenarios). Initially a placeholder (ETA 2–3 months, see §13).

Fees: transparent table for mint, redemption, and operational charges.

4. Jurisdiction and Regulation

The issuer is based in the Turkey, but target perimeter to obtain VARA (Dubai) and/or ADGM (Abu Dhabi) licences. Public “Legal & Regulatory” section will disclose statuses and documents progressively. Initially, a placeholder (ETA 4–5 months).

KYC/KYB/AML: according to UAE law and international standards (sanctions, PEP, source of funds).

Sanctions and geo-restrictions: restricted jurisdictions will not be serviced.

Cross-border trade: compliance guides, contract templates, and documentation (see §9).

5. Anti-Fraud and User Security

Smart contracts include `freeze/unfreeze` functions enabling address-level freezes upon user request, law enforcement order, or regulator instruction. Policies detailed in a public Freeze Policy.

Dedicated emergency channel, target response time ≤ 24h during business hours.

6. Proof-of-Reserves Transparency

Monthly Proof-of-Reserves (PoR) audits by licensed UAE auditors, matching supply and bank-held reserves.

Public dashboard: supply by networks, TVL, mint/burn operations, and reserve account statuses.

Publishing calendar and PoR report format disclosed in the Transparency section.

7. Smart Contract Design

Networks (Phase 1): Ethereum (ERC-20), Tron (TRC-20); later expansion. Roles:

a. Owner/Governance — manage roles and parameters.

b. Minter/Burner — mint and burn tokens.

c. Freezer — freeze/unfreeze specific addresses.

d. Pauser — global emergency pause.

e. Upgrader — proxy upgrade manager (UUPS/Transparent Proxy with timelock & approval).

Events: Mint, Burn, Freeze, Unfreeze, Pause, Unpause. External audits will be published in the Audit section.

8. Operations

Client onboarding: application → KYC/KYB → agreement → fiat/crypto channel selection → mint.

B2B integrations: SDK/invoice links, merchant/exchange wallet instructions, and policy templates.

9. Legal Cross-Border Payments via LUSD

Supplier/Buyer contract → invoice in USD → payment in LUSD → redemption to USD account → closing documents.

Public templates: invoices, reconciliation acts, statements.

Compliance: disclose fund origin, supply chain traceability, export permits if required. Restrictions: sanctioned/blocked countries remain off-limits (see §4).

10. Fees and Commissions

Mint/Redeem: public table (fixed/range, free windows). Operational fees: urgency, high-volume, or special channels.

Discounts/partnership terms for merchants and ecosystem partners (separate policy).

11. Risks and Stress Plan

Liquidity: maintained buffers; temporary redemption windows and liquidity fees in systemic stress.

Technical risks: code audits, bug bounty, monitoring, timelocks, “break-glass” recovery. Legal risks: regulatory updates, proactive disclosures in Legal & Regulatory.

12. Communications and Transparency

Transparency page: supply, TVL, networks, reserves, report links, contract addresses. Sections for Individuals / Merchants / Exchanges — step-by-step guides.

Dynamic widgets for trade flows, blog updates, and system status.

13. Disclaimers

LUSD is a payment stablecoin, not an investment product. It does not promise or generate yield.

Legal and audit documents will be published as they are finalized; absence at launch does not affect the 1:1 principle or USD reserve status.

Users agree to Terms, Privacy Policy, Freeze/Redemption/Fees/Sanctions policies.