# What Is USDV?
USDV is a stablecoin running on the Fantom blockchain. USDV is designed to maintain a stable value against the US dollar. Since USDV is pegged to the US dollar, it means that 1 USDV is equal to \~$1.
USDV is backed by a cryptocurrency collateral, which is held in an amount greater than the amount of stablecoins issued. Hence, when users deposit accepted digital assets (wBTC, wETH or FTM) as collateral into [vaults](/usdv/contact-information/usdv-glossary.md), USDV is successfully minted. This is known as "overcollateralization" and is intended to provide a buffer against price fluctuations and ensure stability in the value of stablecoin.
Moreover, USDV is decentralized and non-custodial, i.e. only users have direct access to their funds. Users will not be charged any interest for minting USDV using vaults. That said, they can hold their collateral in vaults and use minted USDV without paying any interest.
### *Collateralization principal of the USDV*
The collateralization principle of USDV involves depositing a certain amount of cryptocurrency as collateral to mint USDV stablecoin. The collateral serves as a guarantee for the value of USDV and helps to [maintain its peg](/usdv/usdv-explained/what-is-usdv/how-does-it-work.md#how-is-peg-maintained) to the US dollar.
The collateralization ratio, which represents the amount of collateral required to mint a certain amount of USDV, varies depending on the cryptocurrency used as collateral and the stability of the market.
Note that the collateral is stored in smart contracts and can be [liquidated](/usdv/usdv-explained/liquidations.md) when the value of the collateral falls below a certain threshold, which helps to protect the stability of USDV. In this case, the smart contract would liquidate the collateral and use it to buy back USDV to keep the price stable.
***EXAMPLE***: A user provides collateral of $900 nominated in BTC with a minimum collateral ratio of 150%. A user can get a loan in USDV with a maximum value of 600 USDV, which would be considered as a high risk. To protect user's collateral from quick liquidation during volatile market, users can mint 300 USDV instead of 600 USDV and get a collateral ratio equaled 300%.
Example of Collateralization principal
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