FAQ
Why isn't lUSD a hard 1:1 peg?
Because we'd rather give you a mechanism than a promise. lUSD redeems only through receipts (burn debt → unlock principal), so its price is held by an arbitrage corridor: a firm floor priced by two days of carry, a soft ceiling priced by minting friction. The full mechanics — including the floor's honest limits — are on the peg page.
Why does T+2 exist?
It gives redemptions a predictable settlement window and the venue a smooth withdrawal profile. It is not a lockup: lUSD is liquid immediately, and the receipt itself sells at any moment. The delay prices into the receipt instead of trapping you.
Sell the receipt or redeem it — which should I do?
Redeem when you can wait for unlock and want exact value: principal + yield − 5% of yield. Sell when you want out now: you'll take the market's price, which typically sits near the claim's equity. Selling also hands the buyer the debt — useful if you've already spent your lUSD elsewhere.
What happens if Aave gets paused or loses money?
Both pass through honestly. A paused venue delays redemptions until it recovers (the market stays open; expect discounts). A venue loss reduces claims pro-rata, fee-free — and if it ever exceeded the 20% mint buffer, the lUSD floor arbitrage would suspend until recovery. This is the protocol's largest real risk and it's documented, not hidden.
Can the admin steal my funds?
On testnet, the honest answer is: the admin key could rotate roles in damaging ways — which is why current funds are test funds. What it can never do, by code: re-point your receipt's vault or synth, burn lUSD you haven't approved, trap redemptions behind a disabled market, or fee beyond hard caps. Mainnet adds a multisig and timelock before any real deposit. Full inventory: Admin & governance.
Why is the mint ratio capped at 80%?
Two jobs: it keeps every position over-collateralized by a fifth (there is nothing to liquidate, so the margin must be structural), and it armors the peg floor — redemption arbitrage stays profitable so long as venue drawdowns stay inside that 20% buffer.
Is my deposit's yield guaranteed?
No. Yield is whatever the venue pays, block by block, and can go to ~zero. What is structural: the fee applies only to yield actually earned, and a yieldless deposit redeems its full principal.
Are redeemed receipts worth anything?
No. A redeemed receipt is a spent claim — kept in your wallet as a marked record, rejected by every market entry point. Nobody can sell you one; don't buy one anywhere else.
Which network is loom on?
Base Sepolia (testnet) today. Base mainnet after the independent audit completes. Any "loom" on another chain is fake — verify against Addresses.
Do points guarantee a token allocation?
Points are participation accounting, not a security. The plan — points converting at TGE, revenue share to stakers — is described with all its caveats on the $LOOM page. Until published there, no number anyone quotes you is real.