# Collateral

Perennial is built upon the stablecoin: Digital Standard Unit (DSU).

Think of it as *USDC+*. DSU has all the properties of USDC + additional censorship-resistance properties that protect users of DSU & the protocols that build upon it.

Properties of DSU:

* Fully collateralized
* 100%+ backed by USDC (and 1:1 redeemable for USDC)
* Trust-minimized USDC

DSU is a wrapped version of USDC (deposit 1 USDC, get 1 DSU). DSU is an ERC-20 that can that can then be used in DeFi and redeemed at any time for 1 USDC.

When the DSU protocol receives USDC, it deposits it into a DeFi protocol (namely Compound) that is liquid, battle-tested, and safe from a regulatory perspective.

The core benefit of this: DSU wrapping minimizes trust assumptions in dollar-backed stablecoins (without impacting UX) and reduces risk associated with upstream protocols, making it an ideal stablecoin primitive to build upon.

#### Use in Perennial <a href="#use-in-perennial" id="use-in-perennial"></a>

**Most Perennial users will not have to directly interact with DSU.** When a user uses the Perennial frontend with USDC as collateral, Perennial automatically wraps USDC into DSU and deposits the DSU into the protocol. When a user withdraws their collateral, Perennial will unwrap the DSU and return USDC to their wallet.

**If a user is directly interacting with the Perennial smart contracts, they will need to obtain DSU to open Maker/Taker positions.** This can be done by wrapping/unwrapping directly through the DSU smart contracts ([see here](https://github.com/emptysetsquad/emptyset)). Alternatively, for gas efficiency, developers can use the Batcher contract (see Deployed Contracts) to wrap/unwrap.

#### More info: <a href="#more-info" id="more-info"></a>

Website: [dsu.money](https://www.dsu.money/)

Docs: <https://docs.dsu.money/>