USDso - The Ecosystem Stablecoin for Somnia
Somnia Launches USDso, a Stablecoin That Gives Its Yield Back to the Ecosystem
USDso brings Frax's institutional-grade stablecoin infrastructure to Somnia - underpinning and driving the Somnia ecosystem.
Somnia today announced the launch of USDso, its native ecosystem stablecoin issued and operated by Frax. Built on Frax's GENIUS-compatible frxUSD infrastructure, backed by U.S. Treasury Bills, USDso routes the yield its reserves generate back to the protocols, liquidity providers, and builders who create activity on Somnia.
USDso debuts with strategic support from the Somnia Foundation, which is seeding initial liquidity to anchor the stablecoin's role across the Somnia ecosystem.
Why USDso Exists
Stablecoins are where onchain activity settles, but the yield they produce almost always leaves the ecosystem that hosts them. USDso is built to keep that yield inside Somnia. Yield is routed back to the protocols, builders, and users who generate the activity in the first place. It exists so that deploying stable liquidity on Somnia is not a neutral act, but a productive one.
“In designing USDso, we wanted to make sure the most active contributors to the ecosystem are the ones rewarded. Every dollar deployed in an approved protocol generates yield which flows back to those participants that put that money to work: traders, market makers, liquidity providers, lenders. Active capital is rewarded.” - Peter Lipka (@lippylipka) , CEO, Somnia
What Stands Behind USDso
USDso is built on Frax's GENIUS-compatible frxUSD infrastructure, which follows a conservative reserve approach using high-quality, short-duration USD assets including U.S. Treasury Bills held with regulated custodians. Reserve composition and proof-of-reserves disclosures are maintained by Frax. Minting and redemption are operated entirely through Frax's infrastructure, at a 1:1 ratio against supported assets including USDC, with zero minting fees.
The result is a stable settlement asset backed by institutional-grade collateral, operated by one of the most established teams in stablecoin infrastructure.
"frxUSD was built to bring institutional-grade reserve quality to permissionless onchain finance, and we're seeing growing demand from ecosystems looking for transparent, scalable stablecoin infrastructure. Somnia is exactly the kind of high-performance environment where that infrastructure matters. With USDso, we're excited to bring a trusted, native dollar to their ambitious ecosystem." - Sam Kazemian, Founder and CEO, Frax
The USDso Yield Allocation Framework
Reserves held within Frax's infrastructure generate yield and that yield is the foundation of USDso's economic model. On most networks, this yield leaves the ecosystem. The USDso Yield Allocation Framework is designed so that it flows back.
Yield from USDso deployed in approved protocols is split 90/10:
- 90% is directed to the protocols that actively custody it.
- 10% is directed to an ecosystem-wide insurance fund - exploit coverage, backstop guarantees, and first-loss capital across Somnia.
Yield from USDso held outside approved protocols is redistributed to integrated protocols at launch. Over time, this share may also support the Somnia ecosystem and SOMI buybacks, and it shrinks naturally as more USDso is deployed into approved protocols.
For the time being, yield from USDso not held in approved protocols is redistributed to integrated protocols. Over time, the unallocated share may also support ecosystem operations and $SOMI buybacks, and it reduces naturally as more USDso is deployed into approved protocols.
Protocols on Somnia participate by registering and passing an eligibility review covering real activity, contract audits, and other quality assessments. Once approved, their Time-Weighted Average Liquidity (TWAL) contributes to the total pool, and yield is distributed proportionally.
Each integration compounds USDso's utility across the ecosystem.
Utility Across Every Vertical
USDso is built for a DeFi stack where capital doesn't sit idle - and dreamDEX is the first example of what that unlocks.
@dreamDEXSomnia runs a yield-based CLOB: the reserve yield generated by USDso held on the exchange is distributed to active market makers based on how close their quotes sit to the top of book. The tighter the spread and the more time spent at the top of the book, the larger the share of yield. Instead of paying market makers through token emissions or rebates funded by the protocol's treasury, dreamDEX pays them from the yield the stablecoin itself produces.
This is a new primitive for onchain market structure, and one that only works because the stablecoin, the yield, and the venue are aligned by design.
Somnia's upcoming lending protocol will launch with first-class USDso support for lending and borrowing, deeply integrated with dreamDEX so trading collateral can be lent out rather than sitting idle. Capital on Somnia stays productive across venues.
How each protocol uses its yield is entirely its own choice - subsidizing borrow rates, boosting LP rewards, or funding usage rebates. The framework puts that lever in builders' hands.
The Compounding Effect
Every protocol that productively deploys USDso becomes a protocol that earns from it, and every dollar of USDso retained in the ecosystem strengthens the next integration. The more of Somnia's DeFi stack settles in USDso, the more yield circulates back into the protocols, builders, and users who make the network work.
These are the first integrations. USDso is designed to be the stable primitive across every vertical on Somnia: DeFi, payments, agentic settlement with more in development.
Get Started
USDso is available now on Somnia. Builders and protocols can mint through Frax's infrastructure, integrate USDso into their protocol, and register for the Yield Allocation Framework. Traders and agents can access USDso across Somnia's growing DeFi stack.
Visit https://somnia.network/usdso-stablecoin for more information.
Contract address (Somnia): 0x00000022dA000002656c64D9eA6011ea952D008A
Proof of reserves: https://frax.com/transparency
Audit: Zellic Audit Reports
Disclaimer
USDso is issued and operated solely by Frax Inc. on its frxUSD infrastructure. Frax is solely responsible for USDso, including its issuance, redemption, value, peg, collateralization, reserve management, and custody. USDso is not issued, backed, or guaranteed by USDSO S.A., the Somnia Foundation, or any affiliate (together, the “Somnia Group”). The Somnia Group assumes no responsibility or liability for, and makes no representations or warranties regarding, the issuance, value, peg, stability, collateralization, reserve management, custody, or redeemability of USDso. No member of the Somnia Group is a licensed stablecoin issuer, e-money institution, money transmitter, payment service provider, or bank in connection with USDso.
Minting and redemption of USDso are provided solely by Frax through FraxNet, subject to Frax's terms, and may be delayed, suspended, or changed by Frax. Any redemption rights are exclusively against Frax's infrastructure and not against any member of the Somnia Group.
These materials are for information only and are not an offer, solicitation, or recommendation, or investment, legal, or tax advice. USDso is a means of payment, not an investment, security, or yield-bearing instrument. Holders have no entitlement to reserve yield or any revenue. The Yield Allocation Framework is discretionary and may be changed or withdrawn at any time. USDso is not available where its use would be unlawful or to sanctioned persons. USDso is not a bank deposit, is not insured, and may lose value or de-peg. Blockchain, smart contract, bridge, and third-party infrastructure may fail or be exploited.
Your access to and any interaction with USDso are governed by the USDso Terms of Service, which contain important limitations, risk disclosures, and disclaimers. In the event of any inconsistency between these materials and the Terms of Service, the Terms of Service govern.
About Somnia
Somnia is the Agentic L1 - a hyper-performant layer-1 blockchain purpose-built for AI agents and real-time decentralized applications. With AI-native architecture, built-in reactivity and sub-second finality, Somnia enables builders and creators to ship real-time, autonomous, and fully decentralized products - powered by onchain AI agents. Learn more at somnia.network
About Frax
Frax is a U.S.-based financial technology company building infrastructure for open, stable, and borderless digital money. The platform is anchored by three pillars: Frax USD (frxUSD), a digital dollar fully-backed by U.S. Treasuries via partners such as BlackRock; Fraxtal, a high-performance, Ethereum-compatible blockchain optimized for stablecoin scalability and real-time payments; and FraxNet, a non-custodial fintech platform for institutions and HNWIs to mint, redeem, and earn with frxUSD. Frax serves financial institutions, fintechs, and enterprises seeking secure, compliance-ready access to digital dollars and blockchain infrastructure. Learn more at Frax.com.