> For the complete documentation index, see [llms.txt](https://docs.infrastructure.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.infrastructure.finance/usd.infra-vault/proof-of-reserves.md).
# Proof of Reserves
**TLDR:**
* USD.infra Proof of Reserves verifies the assets backing USD.infra (the “$1 unit”), using on-chain reserve reporting (via M0 reserve assets) and oracle publishing (via Chainlink).
* USD.infra Vault Exchange Rate Oracle publishes a daily exchange rate for the portfolio backing sUSD.infra using:
* **Undeployed Reserves** (liquid reserves)
* **Deployed Capital** (capital deployed into digital infrastructure assets/SPVs)
* **Accrued Revenue** (earned, not-yet-distributed cashflows)
* **Impairments** (losses / write-downs, if any)
* An attestation provider validates off-chain inputs (especially deployed capital + impairments), then publishes data through an oracle network (Chainlink).
The USD.infra Vault is built around a simple promise: make infrastructure finance legible. That means two things must always be transparent:
1. USD.infra backing: Is the stable unit properly backed?
2. USD.infra Vault portfolio exchange rate: What is the deployed infrastructure portfolio worth over time? (See: [Exchange Rate Explained](/usd.infra-vault/how-the-usd.infra-vault-works.md))
This page explains how the USD.infra Vault’s Proof of Reserves works, what is measured, who verifies it, and how the data gets published on-chain.
## **Why Proof of Reserves matters**
Digital infrastructure deployments are real-world assets. They are not instantly liquid and they produce cashflows over time. Proof of Reserves exists so anyone can verify at any time:
* What portion of capital is liquid vs. deployed
* What exchange rate is based on, and how it changes
* What revenue has accrued
* Whether any impairments have occurred
* How the system behaves under stress
This is the trust layer that makes the USD.infra Vault financeable.
## **What gets measured**
The USD.infra Vault’s Proof of Reserves and exchange rate system is built from four components:
1. **Undeployed Reserves**
* Undeployed Reserves are liquid assets held by the protocol that have not yet been deployed into digital infrastructure assets. These are updated daily and are the primary “liquidity base” supporting the system. In practice, these reserves are held in treasury-backed reserve assets via partners like M0, which makes the backing auditable on-chain.
2. **Deployed Capital**
* Deployed Capital is the portion of capital that has been deployed into digital infrastructure assets (typically through structured vehicles such as SPVs) and is now earning contract-linked cashflows. Because deployed assets are off-chain and operational, Deployed Capital is validated via off-chain attestation before being reflected in exchange rate.
3. **Accrued Revenue Pool**
* The USD.infra Vault tracks a Revenue Pool representing revenue earned by deployed assets that has not yet been distributed. This is included in exchange rate so portfolio value reflects earned performance.
4. **Impairments**
* Impairments represent losses or write-downs in the deployed portfolio, if they occur. The USD.infra Vault is designed to hold a reserve buffer that can absorb losses before they affect other stakeholders.
## **How Exchange Rate is computed**
The USD.infra Vault exchange rate is computed daily from the aggregate state of the system:
This exchange rate is then used as the reference value for exchange rate-style protocol redemptions (sUSD.infra → USD.infra), subject to available vault liquidity.
## **How the data is verified and published**
The USD.infra Vault’s Proof of Reserves and exchange rate rely on two layers:
1. **Off-chain validation (attestation)**
* Some values like Deployed Capital and Impairments require off-chain validation because they depend on real-world assets, servicing reports, and structured vehicles. An attestation provider validates these inputs and produces a signed representation that can be consumed by the oracle network for daily exchange rate updates and portfolio events.
2. **On-chain publishing (oracle)**
* The validated values are then published on-chain via an oracle network (Chainlink) so that the protocol can expose:
* Current Undeployed Reserves;
* Current Deployed Capital (attested);
* Current Accrued Revenue;
* Current Impairments (attested); and
* The resulting aggregate exchange rate.
## **Update Cadence**
The USD.infra Vault publishes updates on a predictable cadence:
* Undeployed Reserves: Updated daily.
* Deployed Capital and Impairments: Validated by an attestation provider and used to compute daily exchange rate.
* Full portfolio reporting: Updated as new deployments, repayments, and revenue events occur.
## **What users can independently verify**
The USD.infra Vault’s Proof of Reserves system is designed so users can always answer:
* Is USD.infra backed by reserves?
* How much capital is undeployed vs deployed?
* What revenue has accrued?
* Has there been any impairment?
* What exchange rate is the system using today?
## **Important notes on liquidity & redemptions**
The USD.infra Vault supports two distinct exit paths:
1. **Secondary market exit (DEX):** trade sUSD.infra at a market price (may be above or below exchange rate).
2. **Protocol redemption (sUSD.infra → USD.infra):** redeem at exchange rate-style terms, constrained by vault liquidity while deployed infrastructure assets are not instantly liquid.
