The AUSD stable coin is a soft-pegged cryptocurrency, decentralized, unbiased, collateral-backed, which can be stored in wallets or used on platforms. ADADAO Vaults are non-custodial & permissionless protocol and all generated stablecoins are backed on-chain by an excess collateral.
AUSD is easy to generate, access, and use. The ADADAO Protocol allows users to earn AUSD by placing collateral assets into ADADAO Vaults, which is how AUSD is circulated and users can access liquidity, while others get their hands on AUSD by buying it from brokers or cryptocurrency exchanges.
AUSD can be used exactly like any other cryptocurrency once it has been generated, acquired, or received: it can be sent to others, used to pay for goods and services, or to buy more ADA for creating a leveraged position.
Every AUSD in circulation is directly backed by extra collateral, which means that the collateral is worth more than the AUSD loan, and all AUSD transactions are visible on the Cardano blockchain.

Key Terms:

The Stability Fee : is a fixed percentage calculated on top of the amount of AUSD generated against the collateral of a Vault. Only AUSD is used to pay the fee, which is subsequently transferred to the ADADAO Buffer. This is a one time fee and does not depend on the duration of the loan.
Liquidation ratio : ADADAO Governance expects low price volatility of the collateral if the Liquidation Ratio is low; if the Liquidation Ratio is large, ADADAO Governance expects considerable volatility. Liquidation Ratio will be different for every asset. As we are starting with ADA collateral only, the liquidation ratio will be determined through governance proposal.
Liquidation Penalty : a fee added to a Vault’s total outstanding generated AUSD when a Liquidation occurs, is known as liquidation penalty. This penalty is charged in order to incentivise users to always keep their positions over collateralized.
Collateral Auction Duration : ADADAO Vaults have a limit on how long Collateral auctions can last. The durations of the debt and surplus auctions are global system parameters.