# EUR0 Savings (sEUR0)

**sEUR0** is the savings token for **EUR0**, Usual Protocol’s euro-denominated stablecoin. Built on the **ERC-4626 vault standard**, sEUR0 turns EUR0 from a settlement asset into a **yield-accruing savings instrument** that is **composable, transparent, and fully on-chain**.

Users deposit EUR0 into a **permissionless** ERC-4626 vault and receive sEUR0 in return. **sEUR0 balances do not rebase**. Instead, yield accrues via an **exchange rate that increases over time**, so redeeming sEUR0 returns **more EUR0 than initially deposited**.

Yield is generated by the protocol’s underlying collateral stack—primarily **European sovereign T-Bills and short-term money market funds (MMFs)**—and is distributed through the vault’s **exchange-rate appreciation** mechanism.

***

## Key Facts

* **Underlying asset:** EUR0
* **Standard:** ERC-4626 vault (non-rebasing, accrual-based)
* **Access:** Permissionless — no KYC/KYB requirement
* **Yield source:** European sovereign T-Bills and short-term MMFs
* **Distribution:** Governed via on-chain parameters; rates may vary with market conditions
* **Redemption:** `1 sEUR0 → EUR0 × exchangeRate` (where `exchangeRate ≥ 1`)

***

## How sEUR0 Works

1. **Deposit** EUR0 into the vault.
2. **Receive** sEUR0, which represents your share of the vault’s total EUR0-denominated assets.
3. **Accrue yield passively** as the **sEUR0/EUR0 exchange rate** increases over time.
4. **Redeem anytime** to unwrap sEUR0 and receive EUR0 (principal + accrued yield).

Because sEUR0 follows the ERC-4626 model, integrations across DeFi are straightforward—improving **accounting, interoperability, and yield distribution**. Any protocol that supports **ERC-4626 vaults** can integrate sEUR0 natively.

***

## EUR0 in the Usual Ecosystem

**EUR0** is Usual Protocol’s euro-denominated **Liquid Deposit Token (LDT)**, collateralized by high-quality Eurozone assets. It extends Usual’s multi-currency vision beyond the USD-denominated **USD0** by applying the same core infrastructure—the **Usual Collateral Bridge Infrastructure (UCBI)**—to **euro-denominated real-world assets**.

As USD0 is backed by US Treasury Bills, **EUR0 is backed by short-duration European sovereign bonds and money market instruments**, following the same collateral eligibility principles used across the protocol:

* **Fully collateralized:** No leverage and no fractional reserves
* **Low risk posture:** Sovereign-grade, short-duration instruments only
* **Transparent:** On-chain verifiable with frequent off-chain audits
* **Liquid by design:** Portfolio duration maintained below established thresholds

The introduction of EUR0 reflects the protocol’s **LDT scalability vision** described in the litepaper: the Liquid Deposit Token concept is designed to be extendable to additional asset classes, positioning Usual as a DeFi integration layer across multiple currencies and regions.

***

## Benefits of sEUR0

* **Predictable accrual mechanics:** Value grows through exchange-rate appreciation (no rebases, no manual claiming)
* **Euro-native yield source:** Short-duration European sovereign exposure designed for euro-denominated savings
* **Non-rebasing design:** Compatible with DeFi primitives (LP positions, lending, aggregators) without balance-tracking complexity
* **Permissionless access:** On-chain deposit and redemption with no gatekeeping
* **Governance oversight:** Vault parameters are adjustable via **USUAL governance**, aligning yield distribution with community control

***

## EUR0 vs. sEUR0 (At a Glance)

| Feature       | EUR0                          | sEUR0                              |
| ------------- | ----------------------------- | ---------------------------------- |
| **Purpose**   | Settlement asset              | Savings instrument                 |
| **Value**     | Pegged 1:1 to the euro        | Grows via exchange rate            |
| **Access**    | Free mint / redemption        | Wrap / unwrap via vault            |
| **Use cases** | Payments, collateral, trading | Yield generation, DeFi integration |
| **Design**    | Rebase-free stablecoin        | ERC-4626 wrapper                   |

***

## Rebasing Track (EUR0 Base Layer)

EUR0 also includes a **rebasing mode at the base layer**, where yield is distributed directly to **EUR0 balances**. This track is part of the savings architecture but **remains on EUR0 itself**—it is **not a separate token**.

This rebasing mode supports use cases that require **native balance growth without vault interaction**, such as:

* Simple wallet-based savings
* Integrations where ERC-4626 vault mechanics are not suitable

***

## Relationship to sUSD0

sEUR0 mirrors the design of **sUSD0** (Savings USD0), the yield-bearing wrapper for USD0. Both products use the same ERC-4626 vault pattern:

* Deposit the base stablecoin (EUR0 or USD0) into a permissionless vault
* Receive a non-rebasing receipt token (sEUR0 or sUSD0)
* Accrue yield from underlying collateral via exchange-rate appreciation
* Redeem at any time for the base stablecoin plus accrued yield

This consistent architecture across currencies simplifies DeFi integrations and provides a familiar savings experience regardless of denomination.

***

## Collateral & Risk Management

EUR0 collateral follows the same **multi-layered risk management framework** applied to USD0, adapted for Eurozone assets:

* **Interest rate risk:** Managed via short-duration instruments and strict portfolio duration limits
* **FX risk:** Zero tolerance — only EUR-denominated assets or fully EUR-hedged positions are accepted
* **Credit risk:** Zero tolerance — restricted to sovereign and quasi-sovereign instruments; corporate debt is prohibited
* **Liquidity risk:** Limited to assets redeemable within established timeframes with minimal slippage

Collateral selection and risk parameters are governed by the **Usual DAO**, with **USUAL token holders** voting on eligible Eurozone RWA providers and acceptable asset types.

***

## Summary

sEUR0 converts EUR0 into a **yield-accruing, ERC-4626-based savings instrument** that is composable, transparent, and fully on-chain. It serves as the foundation for **euro-denominated savings** in the Usual ecosystem, extending Usual’s real-world asset infrastructure to Eurozone markets with the same rigor and community-first governance model that underpins USD0 and sUSD0.