Dinero

## Stablecoin

Dinero is an overcollateralized stablecoin pegged to the US dollar. It can only be minted by lending markets and vaults in Interest Protocol. Therefore, it has an extremely low risk of losing its peg. Unlike centralized solutions like USDC, USDT, and BUSD, Dinero is managed by smart contracts. Therefore, all of the collateral behind Dinero is verifiable.
Each lending market and vault that mints Dinero decides on the collateral ratio required. The metric used to express this ratio throughout Interest Protocol is the LTV.
$LTV = Loan / Collateral$
If a market has an LTV of 50%, a user must deposit 1 dollar to mint 0.50 cents of Dinero.
The minters of Dinero always assume its price to be 1 USD regardless of the current spot price in CEXs and DEXs. This means that if the price deviates, arbitrageurs can make a quick profit by borrowing or repaying loans.