> For the complete documentation index, see [llms.txt](https://docs.elara.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.elara.fi/products/selusd.md).

# sELUSD

sELUSD is where the yield happens. Stake your ELUSD and you receive sELUSD in return. It works as a price-accreting wrapper: the number of tokens you hold does not change, but their value rises as returns are distributed. No claiming, no harvesting, no separate reward token. The yield is built into the price.

Yield is pushed to the staking contract once every 24 hours based on returns from execution partners. Each update increases the sELUSD/ELUSD exchange rate, auto-compounding for all holders.

**sELUSD is the instrument that carries the risk.** NAV surplus or deficit is absorbed by sELUSD, not by unstaked ELUSD. Strategy and NAV losses are borne by sELUSD holders, and there is no reserve fund or junior tranche behind them. This is the trade for earning: unstaked ELUSD is not exposed to NAV movement, but it does not earn either.

**Transfer and composability.** sELUSD is freely transferable and technically composable with other protocols. In practice there is no external DEX liquidity or money market listing today, so the primary market is the operative venue. At the contract level, sELUSD can be paused, and an outstanding burn debt blocks both staking and unstaking until resolved.

| Property                      | ELUSD                    | sELUSD                         |
| ----------------------------- | ------------------------ | ------------------------------ |
| **Function**                  | Liquidity / stable value | Yield-bearing wrapper          |
| **Peg target**                | 1:1 USD                  | Appreciates over time vs ELUSD |
| **Yield**                     | None (base layer)        | Price accrual (not rebase)     |
| **Bears NAV Losses**          | No                       | Yes                            |
| **Transferable**              | Yes                      | Yes                            |
| **Redemption**                | Instant (within buffer)  | Unstake → ELUSD → redeem       |
| **DeFi composable**           | Yes                      | Yes                            |
| **External market liquidity** | None today               | None today                     |