FAQs
General
What is Alto?
Alto is a decentralized credit protocol built around its native stablecoin, DUSD. It allows users to borrow or mint DUSD against a variety of collateral types, participate in governance by staking the ALTO token, and earn rewards through activity and protocol growth.
What is DUSD?
DUSD is Alto’s native stablecoin and the unit of account across all markets. It is always treated as 1 USD within the protocol for risk calculations, collateral ratios, and liquidations. DUSD can either be borrowed from liquidity supplied by other users or minted directly against collateral within predefined debt limits.
What is ALTO?
ALTO is the governance and value-accrual token of the protocol. Staking ALTO grants voting power and eligibility for a share of protocol fees. It is also distributed through the reward system, where users can purchase ALTO at a discount through Alto Reward Options (ARO).
Lending and Collateral
What is the difference between borrowing and minting DUSD?
Borrowing uses DUSD that has already been supplied to a pool by other users. Minting creates new DUSD directly against collateral, subject to a market-specific debt ceiling. Borrowed positions pay interest to lenders, while minted positions pay interest to ALTO stakers.
What types of collateral are supported?
Alto supports a range of assets including ETH, liquid staking tokens, yield-bearing tokens, and other approved assets. Each market is isolated, meaning its collateral types, risk parameters, and liquidation settings are independent from the rest of the protocol.
What happens if my collateral value falls?
If the value of a position’s collateral drops and its loan-to-value (LTV) ratio exceeds the liquidation threshold, the protocol will trigger a partial liquidation. Only enough collateral will be sold to bring the position back to a safe level, rather than liquidating the entire position.
Governance and Staking
How does staking work?
ALTO tokens are locked into “containers” with specific durations. Each container has a multiplier that determines how much voting power the locked ALTO receives. Lock durations adjust dynamically based on overall participation. Staked positions also earn a share of protocol revenue for as long as they remain locked.
Can I withdraw my staked ALTO before the lock expires?
No. Once ALTO is locked, it remains locked until the specified duration ends. After expiration, the tokens can be withdrawn or relocked.
What happens during emergencies?
The protocol has two safety modes. Pause Mode temporarily halts staking actions and voting but can be reversed. Rescue Mode allows all users to withdraw their locked tokens immediately but is irreversible and requires redeployment of the contract afterward.
Rewards
How are rewards distributed?
Rewards are distributed through Alto Reward Options (ARO). Instead of free tokens, users receive the right to purchase ALTO at a discounted price. The more interest a user generates or collects, the larger their reward allocation.
Do ARO rewards expire?
There is no fixed expiry, but the price and discount terms may change over time. Exercising earlier can often provide a more favorable price.
Can I transfer or sell my ARO rewards?
No. AROs are not transferable and cannot be traded. They are designed to link protocol usage directly with ownership.
Risk and Safety
What happens if a market fails?
Each market in Alto is isolated. If one market experiences problems (such as a bad oracle feed or collateral issue), it does not affect the solvency or operation of other markets.
Is Alto audited?
Yes. All smart contracts undergo third-party security audits before deployment. Reports are available in the Securitysection.
Can the protocol be upgraded or changed?
Core parameters and upgrades are governed by ALTO stakers. Governance proposals are voted on based on voting power, ensuring that protocol changes reflect the consensus of long-term participants.
DUSD and Usage
Where can I use DUSD?
DUSD can be used within Alto to repay debt, exercise ARO rewards, or participate in governance-related activities. It can also be transferred and used in other DeFi protocols that integrate DUSD.
How is DUSD’s price maintained?
Inside Alto, DUSD is always treated as $1. In external markets, price stability is supported by its collateralized design, debt ceilings, and the ability to use it within the protocol. Arbitrage and market demand further help maintain its peg over time.