---
title: "Overlaid Assets"
description: "Overlaid Assets are non-rebasing ERC-20 tokens minted 1:1 against an underlying stablecoin, plus the three-layer model of underlying, base and staked forms."
keywords:
  - "overlaid assets"
  - "ERC-20"
  - "non-rebasing"
  - "Aave"
  - "backing"
canonical_url: https://docs.overlayer.fi/dive_deeper/overlaid_assets
md_url: https://docs.overlayer.fi/dive_deeper/overlaid_assets.md
last_updated: 2026-05-05T15:42:56.000Z
---

# Overlaid Assets

> Overlaid Assets are non-rebasing ERC-20 tokens minted 1:1 against an underlying stablecoin, plus the three-layer model of underlying, base and staked forms.

Overlaid Assets are the primary assets issued by Overlayer. They are designed to transform existing stablecoins into productive, composable, and interoperable on-chain capital without changing their underlying monetary unit.

An Overlaid Asset is a non-rebasing ERC-20 token minted by the protocol in exchange for an underlying stablecoin, or its Aave receipt-token, at a deterministic ratio of 1:1. Overlaid Assets extend the utility of existing stablecoins through deterministic smart contract rules.

The protocol distinguishes between three layers:

* **Underlying stablecoin:** The base asset supplied to the protocol, such as USDC or USDT.
* **Base overlaid asset:** The non-rebasing settlement form issued by the protocol.
* **Staked overlaid asset:** The liquid yield-bearing form governed by share-based accounting.

Overlaid Assets are fully backed at the aggregate level by underlying assets in the backing contracts, always verifiable on-chain. Redemption is deterministic at the accounting layer.

:::info Interoperability
Interoperability is an extension, not a core dependency. Overlaid Assets can move across chains while preserving unified supply and identical accounting semantics. Cross-chain transfer logic does not change backing, embed yield, or alter staking behavior.
:::

### Why use an Overlaid Asset instead of the underlying?

* **It keeps the settlement form clean:** The base overlaid asset is non-rebasing, predictable, and composable across DeFi integrations. Yield is not embedded into transferable balances.  

* **It makes yield explicit and opt-in:** Users choose whether to remain in the base settlement form or move into the staked yield-bearing form. This avoids hidden complexity and preserves cleaner accounting.  

* **It moves custody and accounting on-chain:** Overlayer shifts the productive layer of stablecoin usage into smart contracts that enforce deterministic minting, redemption, and distribution rules.  

* **It avoids leverage and off-chain execution:** Yield does not come from derivatives, leverage loops, or off-chain capital management. Overlayer acts as a passive interface to underlying on-chain yield sources.  

* **It expands utility without replacing the underlying asset:** Overlaid Assets are designed to function as productive base assets for liquidity, settlement, routing, collateral, interoperability, and reserve construction, while preserving the stablecoin’s original monetary role. Each Overlaid Asset is structurally independent. Users are exposed only to the stablecoin they choose to overlay, without automatic contamination from other supported assets.