# bfUSD Overview

## Introduction

bfUSD (BitFi USD) is a collateralized stablecoin minted against USDT or USDC. Instead of remaining idle, minted bfUSD can be staked into dual ERC-4626 vaults to share protocol revenue, insurance-buffer distributions, and boosted yields.

## Dual Yield Model

* **Horizon bfUSD (hbfUSD):** A low-risk, delta-neutral vault designed for smooth, non-drawdown ratio growth. Its supply is capped at 100 million shares to control risk.
* **Pulsar bfUSD (pbfUSD):** A higher-risk, higher-yield vault with a 2 million share cap that can experience drawdowns between epochs.
* hbfUSD and pbfUSD share a coordinated risk perimeter: part of Horizon's revenue is used to boost Pulsar, while Pulsar's capital (together with a protocol buffer) helps protect Horizon when markets are stressed.

## Redemption Flexibility

bfUSD supports both standard redemptions (3-epoch wait plus manual claim, zero fees) and instant redemptions (0.5% fee, quota-limited). Redeemer contracts currently release USDT on Ethereum, providing liquidity while helping maintain the peg.

## Technical Footprint

* **ERC-4626 compatible:** Both vaults implement the vault standard, exposing `previewDeposit`, `previewWithdraw`, `convertToShares`, and `convertToAssets` helpers.
* **Chainlink pricing:** Stablecoin prices are sourced from Chainlink oracles before conversion.
* **LayerZero aware:** Deposits, withdrawals, and share transfers can cross chains via LayerZero helpers (e.g., `send`, `quoteSend`).
* **Insurance buffers:** Multiple vaults, an on-chain buffer, and a project-funded insurance pool help keep hbfUSD stable even when Pulsar trades sharply.

## Deployment Status

* **Mainnet:** Deployed on Ethereum; see the deployed-contracts page for contract addresses.
* **Testnet:** Deployed on Base Sepolia (ChainId 84532) for testing.
* **Contract code:** The contracts are verified on Etherscan to support independent review.


---

# 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://bitfi-2.gitbook.io/bitfi/developer/bfusd-overview.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.