# UWU Cash (UWU) UWU Cash (UWU) is the fully-backed and unstoppable stablecoin of UWU Protocol. It's over-collateralized with STX, the native cryptocurrency of the Stacks layer, and is designed to be highly decentralized and resistant to censorship. ## Overview of UWU Cash * **Over-collateralized:** Each UWU is backed by at least $1.50 worth of STX deposited in Vaults. Vaults that fail to maintain a collateral ratio of at least 150% are liquidated to prevent insolvency * **Soft-pegged:** The protocol values UWU at $1.00, while letting the price float on the open market. Arbitrageurs stabilize the peg on the open market * **Decentralized:** UWU is only backed by STX, the native cryptocurrency of the Stacks blockchain. This eliminates reliance on centralized assets like Wrapped Bitcoin or USD Coin ## Why UWU Cash? * **Stable:** UWU Protocol uses a variety of mechanisms to help maintain a price that floats around the value of $1.00 at all times * **Permissionless:** UWU is accessible to anyone with an internet connection, regardless of their location or financial status * **Unstoppable:** UWU is decentralized and governance-free. No entity can stop or shut down the protocol, and nobody can freeze or confiscate UWU ## How is UWU generated? When a user deposits STX as collateral into a Vault, they can borrow UWU against it. Vaults must maintain a minimum collateral ratio of 150%, which means the user must deposit a minimum of $1.50 worth of STX for every UWU that is borrowed. The collateral is locked in a smart contract until the borrowed UWU is repaid. ## How does UWU maintain peg? UWU Protocol maintains stability of UWU through the use of liquidations and arbitrage. ### Vault Liquidations In the event that a Vault fails to maintain a minimum collateral ratio of 150%, the Vault is liquidated (closed). During a liquidation, liquidators are able to acquire the collateral held in a Vault by repaying the Vault's debt. ### Arbitrage An arbitrage opportunity arises when the price of UWU on the open market deviates from $1.00. As the protocol always values UWU at $1.00, arbitrageurs can profit by buying or selling UWU to stabilize the price on the open market. --- # Agent Instructions: 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.uwu.cash/protocol-tokens/uwu-cash-uwu.md?ask= ``` 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.