> For the complete documentation index, see [llms.txt](https://docs.theo.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.theo.xyz/platform/thusd.md).

# thUSD

***

### How It Works

<div data-with-frame="true"><figure><img src="/files/o05iuiwBBf0FKqMDi4ds" alt=""><figcaption></figcaption></figure></div>

thUSD is minted 1:1 with USDC or USDT. Under the hood, deposits back a delta-neutral position consisting of three components:

1. **thGOLD** — Theo's yield-bearing gold product, which captures carry from gold exposure.
2. **CME Futures Hedge** — A short hedge on CME gold futures that neutralizes price exposure, isolating the yield component.
3. **Liquid Reserves —** Idle cash for redemptions and liquidity remain in t-bills.

The result is a position that earns gold-derived yield with no net directional exposure to gold prices. Users hold a stablecoin; Theo manages the strategy.

{% hint style="info" %}
All gold related positions are delta-neutral, meaning gold price moves do not affect the backing of thUSD.
{% endhint %}

#### Buy → Stake → Earn

1. **Buy** thUSD using USDC or USDT on venues such as Uniswap and Curve
2. **Stake** thUSD to receive sthUSD
3. **Earn** yield from the delta-neutral gold strategy

The underlying capital is deployed into the gold carry position. Yield accrues to sthUSD holders. thUSD itself does not accrue yield directly — it must be staked.

{% hint style="info" %}
Whitelisted entities can mint / redeem thUSD directly. If you're interested, please contact the Theo team.
{% endhint %}

***

### Where does the yield come from?

thUSD generates yields of **6–10% APY**, sourced entirely from gold markets.

| Source                    | Description                                                                              | Amount |
| ------------------------- | ---------------------------------------------------------------------------------------- | ------ |
| thGOLD                    | Yield from Theo's yield-bearing spot gold product.                                       | 2-5%   |
| Gold Futures Basis & Roll | The spread between spot gold and gold futures on CME generates consistent positive carry | 3-5%   |
| T-Bills                   | Liquid reserves and idle cash is held in the form of t-bills                             | 3-4%   |

***

### Why Gold?

Most stablecoin yields come from one of three places: lending markets, token rewards, or crypto perpetual funding rates. All of these are crypto-native, cyclical, and compress when the market cools.

Gold is different.

The carry trade in gold — earning the spread between spot and futures — exists independently of crypto market conditions. It's a function of interest rates, storage costs, and institutional demand.

This gives thUSD a yield source that is:

* **Uncorrelated to crypto cycles** — yield doesn't disappear in a bear market
* **Backed by one of the deepest markets in the world** — gold is a $13T+ asset class
* **Institutional-grade** — CME futures are regulated, highly liquid, and well-understood

***

### Contracts & Architecture

thUSD lives on **Ethereum** with three core contracts:

| Contract         | Purpose                                               |
| ---------------- | ----------------------------------------------------- |
| **thUSD**        | The stablecoin token (ERC-20)                         |
| **sthUSD**       | The staked/yield-accruing version of thUSD (ERC-4626) |
| **thUSD Minter** | Handles 1:1 minting and redemptions via USDC/USDT     |

#### thUSD vs sthUSD

|                   | thUSD                                  | sthUSD                                                 |
| ----------------- | -------------------------------------- | ------------------------------------------------------ |
| **Description**   | The base stablecoin, pegged 1:1 to USD | The staked version that accrues yield                  |
| **Use Cases**     | Payments, transfers                    | Earning yield                                          |
| **Composability** | Standard ERC-20, integrates anywhere   | ERC-4626, composable in DeFi protocols that support it |


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.theo.xyz/platform/thusd.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.