Add USDT0 as Collateral for $HONEY Minting

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Original post from berastotle: Add USDT0 as Collateral for $HONEY Minting - Collaterals - HONEY

Summary

This proposal seeks to whitelist USDT0 (USD Tether bridged via LayerZero) as a supported collateral asset in the $HONEY minting system on Berachain. USDT0 is the omnichain extension of USDT, the world’s largest and most liquid stablecoin. Whitelisting USDT0 will enable minting of $HONEY against USDT0 deposits.

Motivation

  1. Strengthen $HONEY’s Collateral Base

  • Collateral options for HONEY are USDC and BYUSD (pyUSD). New assets to mint HONEY can be added through governance.

  • As shown in the attached supply chart, $HONEY circulation has dropped ~90% from peak, limiting its utility and DeFi integration.

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  • Currently, 100% of $HONEY supply is backed by BYUSD, as the USDC supply has run out after persistent outflows

  • BYUSD has limited adoption and liquidity in Berachain and broader DeFi.

  • Whitelisting USDT0 introduces a more accessible and liquid collateral option

  1. Leverage the Rise of USDT0 on Berachain

  • USDT0 on Berachain has grown from ~$2M to nearly $10M TVL, even as HONEY supply shrunk, now stabilizing around $8M.

  • The current utility includes:

    • Reservoir RUSD-USDT0 and Beraborrow NECT-USDT0 Kodiak pools with reward vaults

    • Backstop protocol-owned unincentivized liquidity on Kodiak in USDT0-HONEY and USDC.E-USDT0 pairs

    • Supply / borrow in Dolomite

    • PSM collateral for mint Beraborrow’s NECT

    • NECT-USDC.e-USDT0-HONEY 4-pool on BurrBear

  • Integrating USDT0 into $HONEY minting will tap into this momentum, helping expand HONEY’s utility in swaps, lending, and DeFi integrations.

  1. Align $HONEY with the Global Standard

  • USDT is the dominant stablecoin globally ($140B+ supply). It is the de facto unit of account and preferred settlement currency on both CEXs and DEXs.

  • USDT0 provides a seamless path for omnichain users to bring value into Berachain and interact with HONEY-native protocols.

  1. Unlock Institutional and Cross-Chain Opportunities

  • USDT0 team has expressed interest in expanding support for other assets like XAUT0 (Tether Gold) on Berachain.

  • Whitelisting USDT0 sets the stage for strategic collaboration with the USDT0 team and further Proof of Liquidity integrations.

  1. Benefits for Market Makers and LPs

  • Many liquidity providers on Berachain (e.g. Kodiak) prefer USDT as a quote asset to reflect prices from CEXs.

  • Backing $HONEY with USDT0 will greatly unlock capital efficiency and grow DEX volumes (especially driven by CEX-DEX arbitrage volumes), especially as we onboard bring new CEX-listed assets such as SOL, HYPE, SUI on Berachain.

Specification

Conclusion

USDT0 is the gateway to global stablecoin liquidity. Adding it to $HONEY’s collateral set unlocks growth, composability, and credibility. Let’s take the next step for Berachain’s native stablecoin.

FOR: Add USDT0 as collateral for minting $HONEY

AGAINST: Do not change current collateral configuration