> ## Documentation Index
> Fetch the complete documentation index at: https://docs.hylo.so/llms.txt
> Use this file to discover all available pages before exploring further.
# Multi-Asset Architecture
> Scaling hyUSD across multiple collateral assets.
Hylo V1 supported only SOL with **xSOL** and **hyUSD** as synthetic tokens built on top of the protocol's LST pool. Hylo V2 introduces a more scalable, multi-asset approach. The protocol now supports independent collateral pools for each supported asset.
Each collateral pool is split into an **xASSET** and its respective **vUSD**, with the virtual stablecoin acting as a leverage accounting mechanism for the specific pair. The flagship stablecoin **hyUSD** is backed by the combined value of all virtual stablecoins.
## hyUSD Master Equation
Given the set **C** of supported collateral assets, the **hyUSD** supply is defined as:
$$
\text{hyUSD Supply} = \sum_{i \in C}(\text{vUSD}_i \text{ Supply} \cdot \text{vUSD}_i \text{ NAV})
$$
In simpler terms, **hyUSD is backed 1:1 by the sum of all virtual stablecoins** when individual collateral ratios are healthy above **100%**.
## Collateral Pools
Each collateral pool operates independently with its own assets, collateral ratio, risk parameters, and yield mechanism.
| Aspect | Benefit |
| --------------------------- | -------------------------------------------------------------------------- |
| **Separate CR** | Each pool maintains its own collateral ratio |
| **Risk Isolation** | One pool's collateral ratio doesn't affect the others |
| **Independent Rebalancing** | Each pool has its own rebalancing strategy tailored to its collateral type |
| **Yield Mechanism** | Yield-bearing assets pay with yield; others pay a borrow rate |
### SOL Pool
$$
\text{SOL TVL} = \text{vUSD}_{\text{SOL}}\text{ Supply} \cdot \$1 + \text{xSOL Supply} \cdot \text{xSOL Price}
$$
The SOL collateral pool consists of Liquid Staking Tokens (LSTs) supported in Hylo's LST registry, currently consisting of [jitoSOL](https://solscan.io/token/J1toso1uCk3RLmjorhTtrVwY9HJ7X8V9yYac6Y7kGCPn) and [hyloSOL](https://solscan.io/token/hy1oXYgrBW6PVcJ4s6s2FKavRdwgWTXdfE69AxT7kPT).
The total SOL in the pool at any given time is defined as the sum across the set of supported LSTs **L**:
$$
\text{SOL TVL} = \sum_{l \in L} \text{LST}_l\text{ Balance} \cdot \text{LST}_l\text{ Redemption Price}
$$
**Pricing:** Hylo uses true LST pricing via [Sanctum](https://sanctum.so), calculating LST value based on actual SOL in each stake pool. The Pyth SOL/USD oracle then converts SOL to USD.
**Yield:** LSTs generate native staking yield from validator rewards. This yield flows to **hyUSD** stakers and protocol revenue, making leverage effectively free for **xSOL** holders.
### BTC Pool
$$
\text{BTC TVL} = \text{vUSD}_{\text{BTC}}\text{ Supply} \cdot \$1 + \text{xBTC Supply} \cdot \text{xBTC Price}
$$
The BTC collateral pool consists of [cbBTC](https://solscan.io/token/cbbtcf3aa214zXHbiAZQwf4122FBYbraNdFqgw4iMij), backed 1:1 by real Bitcoin in Coinbase's institutional grade custody.
**Pricing:** Pyth BTC/USD price oracle.
**Yield:** BTC doesn't generate native yield. The protocol charges a configurable **borrow rate** on the BTC pool, paid by **xBTC** holders through gradual NAV reduction. The borrow rate is harvested once per epoch and distributed to Earn Pool depositors and protocol revenue.
$$
\text{Collateral Harvested} = \text{Pool Collateral} \cdot \text{Borrow Rate Per Epoch}
$$
### USDC Pool
Hylo V1 intentionally limited its **hyUSD** minting capacity so as to not over-leverage the **xSOL** trade. In Hylo V2, **hyUSD** becomes infinitely scalable with the introduction of a **USDC** pool. **USDC** does not have a leveraged component and is simply defined as a virtual stablecoin.
$$
\text{USDC TVL} = \text{vUSD}_{\text{USDC}}\text{ Supply} \cdot \text{USDC Price}
$$
The USDC pool serves two roles:
1. **Direct hyUSD access:** Users can mint and redeem hyUSD with USDC at a flat configurable fee.
2. **Rebalancing counterparty:** The USDC pool is the other side of all [collateral rebalancing](./collateral-rebalancing) routes, receiving USDC from deleveraging sales or deploying USDC to re-leverage volatile pools as their CR moves into extreme zones.
## Extensibility
Hylo's V2 architecture supports an infinite frontier of collateral pools. Each new pool creates an **xASSET-vUSD** pair which automatically contributes to the **hyUSD** backing. Beyond SOL and BTC, Hylo can support other volatile assets as well as yield-bearing tokens like JLP and RWAs.