Quick answer: Dotare is a decentralized endowment on Cardano that funds global universal basic income from DeFi yield, while preserving the principal indefinitely. Its portfolio is modeled loosely on diversified university endowments like Harvard and Yale, splitting between native ADA staking and five stablecoins, DJED, USDM, USDA, iUSD, and USDCx, deployed on Liqwid Finance. An automated rebalancing bot manages allocation, risk tiers, and safety floors, targeting a blended 7.5% to 8% APY.
The problem with most UBI funding
Most universal basic income programs face the same structural problem: they depend on continuous fundraising, government budgets, or grant cycles that can be cut, delayed, or discontinued. When the funding stops, the payments stop.
Dotare is built differently. Benefactors pledge ADA, which is minted 1:1 into a redemption token (ADAD) they can redeem at any time. The pledged ADA is staked and deployed across Cardano DeFi. The yield that generates, not the principal, funds recurring payments to verified beneficiaries. The endowment itself is designed to last forever, the same way a university endowment funds scholarships in perpetuity without ever spending down its base capital.
That design only works if the endowment actually generates reliable, risk-managed yield. That's where the stablecoin strategy comes in.
An endowment-style approach to DeFi
University endowments like Harvard's and Yale's don't put all their capital in one asset. They diversify across asset classes with different risk and return profiles, rebalance over time, and set floors to prevent any single position from threatening the whole portfolio. Dotare applies that same logic to a Cardano-native DeFi portfolio.
The portfolio splits into two broad pieces:
Native ADA staking, targeted at roughly 15% of the endowment, which earns Cardano's baseline staking yield of about 3% to 3.3% with no smart contract or liquidation risk beyond the protocol itself.
A diversified stablecoin allocation, the majority of the endowment, deployed on Liqwid Finance across five stablecoins, each occupying a different risk tier.
Why not just stake ADA and skip stablecoins?
ADA's price is volatile. An endowment funding recurring UBI payments needs some assets whose dollar value doesn't swing with ADA, so beneficiary distributions stay predictable even when the broader crypto market doesn't. Stablecoins also generally earn a higher lending yield on Liqwid than ADA does through native staking, which is why Dotare stakes ADA directly rather than supplying it to Liqwid: Liqwid's ADA supply rate has historically sat below native staking yield, while its stablecoin markets pay more competitively.
The stablecoin allocation, tier by tier
Dotare classifies each stablecoin into a risk tier based on how it's backed and how it holds its peg, then sizes its position accordingly. Tier 1: Fiat-backed stablecoins The lowest-risk tier. These coins are backed by real dollar reserves held with regulated custodians, not by crypto collateral or algorithmic mechanisms.
- USDM, issued by Moneta Digital LLC, backed 1:1 by USD reserves with daily on-chain proof of reserves via the Charli3 oracle. Targeted at 20% of the endowment.
- USDA, issued by Anzens Inc. with EMURGO and BitGo Trust custody, backed by cash and short-duration Treasury bills. Targeted at 8% of the endowment.
- USDCx, Circle's native Cardano deployment of USDC via xReserve, launched February 2026. The newest addition to Dotare's fiat-backed tier, bringing institutional-grade reserves and the broadest brand recognition of any stablecoin in the portfolio.
Dotare's rebalancing bot enforces a safety floor requiring at least 25% of the endowment's stablecoin exposure to stay in this fiat-backed tier at all times.
Tier 2: Overcollateralized
- DJED, built by IOG and powered by COTI, backed by ADA reserves at a 400% to 800% collateral ratio with SHEN absorbing volatility. Targeted at 45% of the endowment, its single largest position, reflecting DJED's multi-year track record and Cardano-native design. Because it's the largest holding, Dotare runs dedicated DJED spread rules within its rebalancing logic to actively monitor the reserve ratio.
Tier 3: CDP-based synthetics
- iUSD, minted through Collateralized Debt Positions on Indigo Protocol, pegged to the median of USDC, TUSD, and USDT. Targeted at 12% of the endowment. This is the endowment's highest-risk stablecoin tier, given its reliance on volatile ADA collateral, so it's sized more conservatively and monitored more closely than the tiers above it.
Why Liqwid Finance
Every stablecoin in Dotare's portfolio is deployed to Liqwid Finance, Cardano's leading non-custodial lending and borrowing protocol. Liqwid's audited Plutus smart contracts, dedicated stablecoin markets, and multi-year operating history make it the natural home for an endowment that needs to earn real yield on Cardano-native assets without leaving the Cardano ecosystem or relying on cross-chain bridges.
Supplying stablecoins to Liqwid is what converts a static, dollar-pegged position into an income-generating one. That interest income, harvested across all five stablecoin markets, is the mechanism that funds Dotare's recurring UBI distributions.
How it's managed: the rebalancing bot Dotare's endowment isn't a set-and-forget portfolio. A keeper bot, built with MeshJS and TypeScript, continuously manages the live allocation against these targets. It handles:
- **Rebalancing **across the five stablecoin markets and ADA staking to keep the portfolio near its target weights as prices and yields shift.
- Staking sweeps, moving newly accumulated yield into native ADA staking on a regular cadence.
- Safety floors and ceilings, including a minimum 25% fiat-backed stablecoin weighting and a minimum 10% native ADA staking position, so the portfolio can't drift into an overly concentrated or overly risky configuration.
The blended target across the full endowment is roughly 7.5% to 8% APY, a return generated entirely from Cardano-native DeFi yield rather than fundraising, donations, or grant renewals.
What this means for benefactors and beneficiaries
For benefactors, this means pledged ADA isn't just sitting idle or sent off permanently. It's redeemable at any time through the ADAD token, and while pledged, it's working across a diversified, risk-tiered portfolio designed the way institutional endowments manage long-horizon capital.
For beneficiaries, it means UBI distributions are funded by a portfolio built to survive market volatility rather than one big bet on a single asset or protocol. Fiat-backed stability, overcollateralized yield, and CDP-based diversification work together so that no single stablecoin's depeg, and no single quarter's ADA price swing, determines whether payments go out.
##FAQ What stablecoins does Dotare's endowment hold? DJED, USDM, USDA, iUSD, and USDCx, all deployed on Liqwid Finance, alongside natively staked ADA.
What is Dotare's target allocation? The lowest floor is 3% and the highest ceiling is 50% depending on the asset. Weights are actively managed rather than fixed.
Why does Dotare use a tiered risk framework instead of picking one stablecoin? Diversifying across fiat-backed, overcollateralized, and CDP-based stablecoins spreads risk the way a university endowment diversifies asset classes, so no single mechanism's failure threatens the whole portfolio. In addition yeild per stablecoin varries over time, so no one coin is optimal.
What is the target return on Dotare's endowment? The blended target across the full portfolio is roughly 7.5% to 8% APY.
How do I become a benefactor? Pledge ADA through Dotare's app. Your ADA is redeemable at any time through the 1:1 ADAD token, and while pledged, it's deployed across this diversified stablecoin and staking strategy to fund UBI distributions.
This is the strategy behind every UBI payment Dotare distributes: a diversified, actively managed Cardano DeFi portfolio built to last forever. Become a Benefactor and put your ADA to work today, or dig into the individual guides on DJED, USDM, USDA, iUSD, USDCx, and Liqwid Finance.
