Decentralized
Euro.

The 10% annual percentage rate (APR) offered on dEURO savings comes from its overcollateralized lending model, where users lock up volatile crypto assets (such as BTC or ETH) to mint dEURO stablecoins. These locked assets effectively back the issuance and are subject to stability fees or interest, which fund the yield paid to depositors. In this sense, the yield isn’t created “out of thin air,” but comes directly from users who pay to access liquidity via dEURO, similar to how borrowers pay interest in traditional finance.

dEURO maintains its 1:1 peg to the euro through decentralized collateralization: each dEURO token is backed by crypto assets with a value significantly higher than the value of dEURO in circulation. If collateral values fall, automated liquidation mechanisms ensure the system stays solvent. No centralized entity is responsible for the peg—it is enforced algorithmically through smart contracts and collateral requirements.

dEURO tokens are minted when users deposit supported collateral (e.g., BTC or ETH) into the protocol’s smart contracts. Based on the collateral’s value and required collateralization ratios, users can generate new dEURO tokens, which they can then spend, save, or trade. This process is entirely on-chain and permissionless, meaning anyone can mint dEURO by providing sufficient collateral.

No, the APR itself applies to dEURO holdings within Cake Wallet’s savings module, regardless of which assets users originally deposited to mint dEURO. However, because Cake Wallet primarily supports Monero (XMR) and BTC users, many depositors convert these assets into dEURO to earn the yield. The yield is ultimately funded by borrowers who mint new dEURO, rather than directly by holding Monero or BTC.

dEURO relies on several safeguards:

Overcollateralization: Users must always deposit more value in collateral than the dEURO they mint.

Liquidation mechanisms: If collateral values drop below the required ratio, smart contracts automatically liquidate collateral to cover outstanding dEURO, keeping the system solvent.

Decentralization and transparency: All collateral, debt positions, and liquidations are visible on-chain, so anyone can verify the protocol’s health in real time.

No centralized custodians: Since the system doesn’t rely on a single custodian or oracle, there’s no central point of failure.