> For the complete documentation index, see [llms.txt](https://docs.multipli.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.multipli.fi/user-guide/mainnet-guides/rwausds-proxy-layer.md).

# rwaUSD’s Proxy Layer

When you create a position on Multipli’s rwaUSD page for the first time with a new wallet, you must have noticed that you are asked to sign a transaction to create a proxy contract.

What is a proxy contract and why is this step required?

The proxy contract is the middle layer between you and the smart contract, and it helps simplify the complex and interminable user experience of Multipli’s core. Let’s learn more about it.

**Topics Covered:**

* Key Terms
* Why do I need a proxy contract in Multipli?
* Why is my permission required to create a proxy contract?

### Key Terms

**CDP:** A Collateralized Debt Position is a mechanism that lets you lock up your crypto assets as collateral to borrow against.

**Proxy contract:** A proxy contract is a smart contract that acts as the middle layer between the users and the code/logic of the application. In Multipli, the core smart contract is a powerful and complex tool. If users were to interact with it directly, it would be lengthy and awkward to use. This proxy contract bridges that gap, with the help of the CDP Manager and the proxy registry.

**Proxy registry**: A registry used to store and match a proxy contract with its assigned wallet.

**Proxy actions:** Proxy actions are pre-built smart contract functions that let users interact with Multipli in a simpler manner through their proxy contract.

**CDP Manager:** It manages all interactions between the user’s proxy contract and the CDPs it owns.

### Why do I need a proxy contract in Multipli?

To explain this, we will have to dive a little into Multipli’s core system.

Every time you interact with rwaUSD, you’re probably executing multiple transactions in a single click. For example, when you execute a transaction depositing your collateral into Multipli and converting it to rwaUSD, you are doing it in a single click. However, in the smart contract under the hood, these are multiple transactions. This is where the proxy contract comes in: a smart contract with access to multiple CDP Managers and proxy actions to help execute multiple transactions in a single step.

### Why is my signature required to create a proxy contract?

When you create a position on Multipli’s rwaUSD page for the first time with a new wallet, we require your signature to set up a proxy contract. This contract is assigned to the wallet you signed up with, which is stored in the proxy registry. This ensures we only need your signature once. The next time you sign in using the same wallet, we use the proxy registry to pull the contract assigned to that wallet.


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