UPFI is the first stablecoin protocol built around principles for very high scalability, non-custodial operation, extreme stability, fractional-algorithmic mechanics, and fully on-chain finance on Solana. It also enables next-generation payment networks on-chain. UPFI is designed to move beyond fixed-supply digital assets by narrowing the gap between digital currencies and real-world use cases, aiming for transaction costs that are almost zero.

The UPFI token is partially collateralized and partially algorithmically stabilized, and it is soft-pegged to the U.S. Dollar. The protocol’s objective is to maintain a stable UPFI token price. 

USDC and the UPFI share token (UPS) are used as collateral. When a user mints UPFI by depositing USDC and UPS, the USDC is locked within the protocol, while the deposited UPS is burnt. When a user redeems UPFI to receive the underlying collateral, they receive their deposited USDC back, and the protocol mints UPS. This dual-collateral setup combined with the redemption flow is intended to support UPFI price stability.