Though we use the terminology of “Borrowers” in the descriptions below, this is really the participant who mints the USB stablecoin, i.e., the ‘minter.’

Depositing altcoin collateral

Altcoin holders deposit collateral into user-specific and asset-specific Collateral Safes within the USP. For example, if the user deposits two different projects’ tokens, they will establish two different Collateral Safes.
In return for their altcoins, users receive a non-transferable token called $PIT, which standardizes their collateral assets. Each $PIT is pegged to 1 USD. As such, $PIT represents the Borrower’s borrowing capacity in USD. The amount of PIT tokens awarded to the Borrower for the assets they deposit is based on the LVR for the asset deposited. A user's $PIT balance can be calculated using the following formula:
The formula to calculate a user's $PIT balance.
The user’s $PIT balance (i.e. borrowing capacity) will fluctuate with the market price of the assets they deposited on the platform as collateral.

Minting $USB

Borrowers can mint USB stablecoins ($USB) based on the amount of PIT tokens they have available. (It can be thought of as a $USB loan that eventually will need to be paid back. The remainder of this description will use the analogy of a $USB loan).
Each specific loan is taken out in relation to a specific Collateral Safe. Therefore, a user may have multiple loan positions open at any time, associated one-to-one with multiple Collateral Safes.
If the Borrower has remaining borrowing capacity for a given Collateral Safe (i.e. remaining PIT tokens), the loan amount can be extended by borrowing additional USB stablecoins.

Interest charges on open USB positions

The USB Stablecoin’s prevailing Stability Fee can be thought of as the ‘interest rate’ charged to open $USB loan positions. Interest is charged on each of the Borrower’s open loan positions. This is calculated per block and is accrued to each loan position.
The platform presents both the loan principal amount and the accrued interest amount for each loan. Accrual of interest effectively increases the amount the Borrower needs to repay to settle the loan. Accrual of interest also reduces the amount of the Borrower’s available PIT tokens. i.e. reduces their remaining borrowing capacity.

Repaying USB positions

Any repayment of USB stablecoins to settle a loan position is first applied to the accrued interest amount and then applied to the loan principal amount. Repaying any part of a loan increases the Collateral Safe’s borrowing capacity. i.e. increases the amount of available PIT tokens.