USDai $100m Cap Raise for Euler Unwind

On Wednesday October 8th at 12 EST, we’re increasing the USDai caps to provide liquidity for the orderly unwind of borrowing for the Euler Frontier USDai vault. USDC deposits will only be accepted using autoUSDai on Arbitrum.

This is a targeted, temporary measure designed to stabilize the Frontier USDai market and ensure smooth redemption dynamics. During this period, autoUSDai will earn a 25× Points multiplier (matching Pendle’s multiplier) for the next 30 days or until the Euler markets have been sufficiently wound down.

What’s Changing

The USDai cap is being raised by $100m exclusively for the autoUSDai vault.

All USDC deposits will flow directly into autoUSDai on Arbitrum and will be used to mint protocol controlled USDai.

Funds in autoUSDai will be used to facilitate Euler liquidations and unwind buybacks.

If these unwind operations generate profits, those gains will be returned to autoUSDai depositors as additional yield.

autoUSDai deposits earn a 25× Points multiplier for 30 days, a one-time incentive designed to attract liquidity during this stabilization phase.

To unwind these USDai borrow positions safely, liquidity must be available inside the protocol, not on external markets. autoUSDai provides exactly that: an internal, protocol-native liquidity pool that can absorb USDai sales and allow borrowers to exit positions without triggering undue volatility or extreme liquidations.

K3 Capital will take over as risk curator for the USDT0 vault once the borrows are reduced.

What Participants Receive

By depositing into autoUSDai, participants will:

• Earn 25× Points during the 30-day window
• Potentially receive additional yield from realized trading profits during the unwind
• Contribute directly to stabilizing the protocol and preparing for the next phase of USDai expansion

Global Unaligned Points Reduction

Additionally we are reducing the Allo Game™ multiplier for all non-aligned pools down from 10x to 3x.

This reduction will go into effect today. All USDC/USDT/USDE pools on Euler, Silo, and Morpho will be affected.

Next Steps

The autoUSDai cap increase goes live Wednesday October 8th at 12 EST. The 25× Points multiplier begins immediately and remains active for 30 days or until the Euler Frontier USDai market is sufficiently wound down.

Once the Euler unwind is complete, autoUSDai rewards will revert to their standard multipliers.

This is a one-off event, focused purely on stabilization and risk management, ensuring USDai remains the most reliable, composable AI dollar in DeFi.