USDB (Bucket USD) is a decentralized, over-collateralized stablecoin native to the Sui blockchain and issued by the Bucket Protocol. It is soft-pegged to the value of the U.S. Dollar. USDB is generated when users borrow against a basket of accepted crypto-assets locked in smart contract vaults, and its stability is maintained through a combination of over-collateralization, market arbitrage opportunities, and a robust liquidation mechanism. ^{[1] [2]}​

History

The stablecoin issued by Bucket Protocol was originally named BUCK. As part of a major protocol upgrade in 2025, the stablecoin was rebranded to USDB. ^[3]​

Throughout 2024, the protocol introduced several features to enhance the stability and utility of its stablecoin. On January 18, 2024, Bucket Protocol integrated a Peg Stability Module (PSM) to improve the peg by allowing 1:1 swaps with other established stablecoins like USDC. On February 23, 2024, the protocol implemented fixed interest rates for borrowing to offer users more predictable costs. The list of accepted collateral was expanded on February 27, 2024, to include afSUI/SUI Liquidity Provider (LP) tokens. ^[2]​

In 2025, Bucket Protocol initiated a significant upgrade, transitioning from its V1 architecture to V2. This upgrade introduced USDB to replace the legacy BUCK stablecoin, with users required to migrate their BUCK holdings and debt positions to USDB at a 1:1 ratio. The stated goals of the upgrade were to create a "simpler, safer, more cost-efficient, and more flexible CDP system." Key changes included the removal of a 0.3% one-time borrow fee, the elimination of a system-wide "Recovery Mode" to simplify risk management for users, and a redesigned liquidation process. ^[4]​

On September 16, 2025, the protocol officially announced the rebranding from BUCK to USDB on social media, stating it was "not just a rebrand but the start of a stronger, clearer stablecoin era on Sui." ^[3] Following the upgrade, on October 10, 2025, USDB experienced a period of significant price volatility, recording both its all-time high of 0.878 on the same day before recovering its peg. ^[5]​

Peg Stability Mechanism

USDB maintains its 1:1 peg with the US Dollar through a multi-faceted system that creates economic incentives for arbitrageurs to correct price deviations, establishing both a price floor and a price ceiling. ^{[1] [6]}​

Over-collateralization and Minting

USDB is created when users borrow it against collateral deposited into a smart contract vault known as a "Bucket." To mint USDB, a user must lock up accepted crypto assets with a value greater than the amount of USDB they wish to borrow. The protocol enforces a Minimum Collateral Ratio (MCR) of 110%, meaning that for every 100 USDB minted, at least $110 worth of collateral must be maintained in the Bucket. This over-collateralization ensures that all circulating USDB is sufficiently backed by a surplus of assets, protecting the system from collateral price volatility. ^{[4] [6]}​

The MCR also functions as a soft price ceiling. If the market price of USDB were to rise significantly above 1 and sell it on the open market. This act of selling increases the supply of USDB, applying downward pressure on its price and guiding it back toward the $1 peg. ^[6]​

Redemption (Hard Peg)

The redemption mechanism serves as a hard price floor for USDB. Any user can redeem USDB directly through the Bucket Protocol to receive an equivalent value in underlying collateral, minus a small redemption fee. For example, 100 USDB can be redeemed for 1. ^[2]​

This function creates a direct arbitrage opportunity. If the market price of USDB falls to 1.00 worth of collateral, and then sell the collateral for a profit. This market activity generates buying pressure on USDB, driving its price back up towards $1.00. ^{[1] [7]}​

Peg Stability Module (PSM)

The Peg Stability Module (PSM) is a smart contract that provides a highly-liquid, on-chain mechanism to enforce a tight price ceiling. It allows users to swap other whitelisted, reputable stablecoins for USDB at a 1:1 ratio, minus a small minting fee. This facility acts as an additional source of USDB supply that is not dependent on debt-based minting. ^{[1] [2]}​

When the market price of USDB rises above 1 by swapping in an asset like USDC, and then sell the newly minted USDB on the open market for a profit. This selling pressure helps bring the USDB price back down to its peg. The PSM has different fees for swapping assets in (minting USDB) and out (redeeming USDB).

Direction	Asset	Fee	Description
PSM IN (Mint USDB)	​USDC​	0%	Swap for USDB with no fee.
PSM IN (Mint USDB)	suiUSDT	0.05%	Swap suiUSDT for USDB with a minimal fee.
PSM OUT (Redeem USDB)	​USDC, suiUSDT.	0.30%	Swap USDB back to an external stablecoin for a fee.

This fee structure is designed to favor actions that restore the peg. Swapping into USDB using USDC is free, encouraging arbitrage when USDB > $1. ^[1]​

Liquidations and the Stability Pool

If the value of a user's collateral drops to the point where their collateral ratio falls below the 110% MCR, their Bucket is flagged for liquidation. The liquidation process is crucial for maintaining the solvency of the protocol by ensuring under-collateralized positions are removed from the system. ^[6]​

The Stability Pool is the first line of defense in managing liquidations. It is a pool of USDB deposited by users who act as "Stability Providers." When a Bucket is liquidated, an amount of USDB from the Stability Pool is burned to pay off the an-collateralized positions are removed from thesystem in an orderly fashion, preserving its overall solvency. The Stability Pool is the first line of defense in managing liquidations. It is a pool of USDB deposited by users who act as "Stability Providers." When a Bucket is liquidated, an amount of USDB from the Stability Pool is burned to pay off the outstanding debt. In return for providing this liquidity backstop, Stability Providers receive the liquidated collateral (often at a discount to its market price) and are rewarded with protocol token emissions. Sources have variously referred to these reward tokens as BKT, BUT, or BUCK, reflecting different stages or aspects of the protocol's ecosystem. ^{[2] [5] [6]}​

Flash-Mint Assisted Arbitrage

To enhance capital efficiency and lower the barrier to entry for arbitrage, Bucket Protocol offers a feature called Flash Mint. This tool allows advanced users to mint USDB without providing upfront capital, execute an arbitrage trade, and repay the minted USDB all within a single, atomic transaction. This increases the efficiency of the peg-keeping mechanism by enabling more participants to engage in arbitrage. ^[1]​

Market Data and Tokenomics

As of December 3, 2025, various data aggregators reported key metrics for USDB and the Bucket Protocol. The market capitalization (circulating supply) was reported at approximately 74.8 million. The protocol's savings module held over $19.3 million in deposits. ^[7]​

Metric	Value (as of December 3, 2025)	Source
Price	~$1.00	​[5]​
Market / Circulating Supply	$38,274,697	​[7]​
Total Supply	28,544,849 USDB	​[5]​
24-Hour Trading Volume	$604,735	​[5]​
All-Time High	$1.04 (October 10, 2025)	​[5]​
All-Time Low	$0.878 (October 10, 2025)	​[5]​
Protocol TVL	$74,790,995	​[7]​

Ecosystem and Utility

USDB is integrated into the Bucket Protocol and the wider Sui DeFi ecosystem, serving several functions for users. ^[2]​

Borrowing

The primary method for USDB creation is through borrowing. Users can lock their supported crypto assets in a Bucket to take out a loan in USDB, allowing them to access liquidity without selling their holdings. The V2 upgrade made this more cost-effective by removing the 0.3% one-time borrowing fee that existed in the legacy BUCK system. ^[4]​

Yield Generation

USDB holders can earn a return on their assets through several mechanisms within the protocol.

• Stability Pool Staking: As described in the liquidation mechanism, users can deposit USDB into the Stability Pool. They earn a pro-rata share of collateral from liquidated positions and receive protocol token incentives. This provides a variable yield tied to the liquidation activity on the protocol. ^[6]
• Savings Module: USDB can be deposited into the protocol's savings module or "Savings Tank" to earn a variable yield. The yield is generated from protocol revenues, such as borrowing and redemption fees. As of late 2025, the stated APR was 11.5%. ^[7] When users stake or save their USDB, they receive an interest-bearing token, which sources refer to as sUSDB (staked USDB) or bUSDB (Bucket USD Bill). This token represents the user's deposit plus accrued yield and can be redeemed for a larger amount of USDB over time. ^{[4] [5]}

DeFi and Trading

USDB is used as a base asset for trading pairs and liquidity pools on decentralized exchanges (DEXs) across the Sui network. It can be traded on exchanges such as Cetus, Kriya DEX, Aftermath Finance, FlowX, and Bluefin. Its stability makes it suitable for providing liquidity, and it is a common pairing with SUI and other stablecoins like USDC. ^{[5] [7]} The protocol also has a strategic partnership with the Scallop lending platform, where USDB is integrated as a primary collateral and borrowable asset. ^[7]​

Technical Details

Asset Information

• Full Name: Bucket USD
• Ticker: USDB
• Blockchain: Sui
• Sui Contract Address: 0xe14726c336e81b32328e92afc37345d159f5b550b09fa92bd43640cfdd0a0cfd::usdb::USDB

These technical details are confirmed by multiple market data aggregators and explorers. ^{[5] [8]}​

Collateral Types

​Bucket Protocol accepts a diverse range of crypto assets as collateral for minting USDB. Supported assets include:

• The native SUI token
• Liquid Staking Tokens (LSTs) such as haSUI, vSUI, and afSUI
• Wrapped blue-chip assets like Bitcoin (BTC) and Ether (ETH)
• Liquidity Provider (LP) tokens
• Yield-bearing assets like Scallop Protocol's sCoins

The ability to use yield-bearing assets as collateral allows users to continue earning returns on their underlying assets while borrowing USDB. ^{[7] [2]}​

Wallet Support

As a native asset on the Sui network, USDB is compatible with wallets that support the Sui ecosystem. It is not supported by wallets that are exclusively focused on Ethereum Virtual Machine (EVM) chains, such as MetaMask. Supported wallets include:

• Suiet Wallet
• Sui Wallet
• Ethos Wallet
• Surf Wallet
• Martian Wallet
• Trust Wallet
• Phantom
• OKX Wallet
• Bitget Wallet

This information is based on lists provided by cryptocurrency data platforms. ^{[8] [6]}​

Governance

The parameters of the USDB stablecoin and the broader Bucket Protocol are not centrally controlled. Instead, they are managed by the holders of the protocol's governance token, **BUT holders can propose and vote on changes to the protocol. Key parameters subject to governance include:

• Adding or removing collateral types;
• Adjusting risk parameters like the Minimum Collateral Ratio, liquidation ratios, and interest rates;
• Modifying protocol fees for borrowing and redemptions;
• Allocating funds from the protocol treasury.

This governance model allows the protocol to adapt over time based on community consensus. ^[2]​