Why, How, What?
Why, how, what - this page delivers a brief overview of the intention behind OFD.
Why OFD?
Most stablecoins depend on centralized oracles to function. These oracles introduce critical vulnerabilities: they can be manipulated, censored, or become unavailable. Worse, they often act as the single point of failure in otherwise decentralized systems.
Oracle Free Dollar (OFD) takes a different path. It is built on the belief that price stability can be achieved without external price feeds. By replacing oracles with transparent governance, market-based enforcement, and overcollateralization, OFD creates a more resilient and censorship-resistant alternative.
How does it work?
Users mint OFD by locking up collateral in smart contract positions. Each position defines its own liquidation price. If the market believes a position is undercollateralized relative to that price, anyone can initiate a challenge. Successful challenges trigger a liquidation auction to cover the outstanding debt.
The protocol is governed by OFDPS holders (Oracle Free Dollar Pool Shares). They:
Provide reserve capital
Earn system fees
Vote and veto risky proposals
Collateral types and system rules are managed through this governance process without relying on external data.
What is OFD?
OFD is a decentralized, overcollateralized stablecoin deployed on Binance Smart Chain. It is designed to maintain a soft peg to the US dollar without oracles.
Key properties:
Minted through user-created or cloned positions
Backed by configurable on-chain collateral
Stabilized via liquidation and challenge mechanisms
Governed by veto power and system parameters set by OFDPS holders
OFD is intended to be a stable, trust-minimized unit of account for users, builders, and investors seeking a truly decentralized alternative to oracle-dependent stablecoins.
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