Regarding the Dynamic APY Pricing Mechanism

To ensure the long-term stability and sustainability of the protocol, the USDD team has adopted a "Dynamic APY Pricing Model" for interest rate evaluation and adjustment. The calculation of the Base APY primarily considers the following core factors:

• Crypto Market Benchmark Reference: Continuously monitoring the 7-day moving average yield of mainstream, high-quality yield-bearing stablecoins in the crypto market to serve as the industry baseline.

• Federal Reserve Rate Reference: Incorporating traditional finance risk-free rates (such as the US Federal Reserve target rate) into consideration, ensuring the Base APY remains above traditional market benchmarks to safeguard users' baseline returns.

• Market Competitive Premium: Building upon the dual benchmarks mentioned above, maintaining a competitive premium to ensure the provision of market-competitive returns for users.

• Underlying Yield and Healthy Balance: Taking into account the actual comprehensive return on investment of the protocol's underlying assets, maintaining the overall interest rate within a healthy range while safeguarding capital efficiency, thereby achieving long-term sustainability.