# How it Works eUSD is a decentralized, capital-efficient and over-collateralized USD stablecoin built on a modular & upgradable architecture. It is minted exclusively on Ethereum and bridged to Eden, the EVM-compatible L2 built on Celestia, via Hyperlane. The protocol consists of several independent modules which can be added, upgraded, or removed over time, from which eUSD is issued and redeemed. Each module manages its own collateral type, parameters, and minting logic, without disrupting the rest of the system. eUSD is designed as a modular and scalable system where each functional component exists as an independent module. These modules can be deployed, upgraded, paused, or reconfigured without disrupting the entire protocol. This architecture allows the protocol to onboard new collateral types, adjust risk parameters, and extend functionality over time while keeping the stablecoin itself intact. Yield generated by backing assets is not redistributed to eUSD holders, instead, 90% is used to buy back TIA and distribute it as incentives across Eden, directly connecting stablecoin growth to ecosystem value. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.eusd.xyz/products/how-it-works.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.