For users trading perpetual contracts on Buffer, the platform uses USDC as collateral.
Buffer has integrated Perennial v2's sophisticated collateral mechanism using the Digital Standard Unit (DSU), an advanced stablecoin standard. DSU is essentially an enhanced version of USDC, often referred to as "USDC+", as it maintains all the fundamental properties of USDC while adding significant benefits, particularly in terms of censorship resistance. This feature is crucial for protecting the interests of DSU users and the protocols that utilize it.
DSU is a fully-backed, trust-minimized & community-owned stablecoin for web3. The stablecoin holds all the properties of USDC, except it has the added benefits of censorship resistance, designed to protect DSU users and protocols that build on top of it.
All markets are quoted in USD, and the profit and loss (P&L) are settled in USDC. Behind the scenes, the Frontend automatically wraps this USDC into DSU and manages it within the protocol. This process is seamless from the user's perspective, as most do not need to interact directly with DSU.
Similarly, when a user withdraws, their collateral, the frontend unwraps the DSU and returns USDC to user's wallet.