# $USC's peg stability & Redemptions

Each $USC is pegged to the value of 1 USD. As such, this parity between $USC and USD is anchored in the system as equilibria - users naturally view $1 to be the point of reversion for $USC during periods of volatility. In addition to this, any $USC that is minted, repaid or redeemed on Orby Network is settled at parity value of $1.

With this anchor point and condition in mind, there are actions that users can take in times where $USC is temporarily depegged:<br>

If $USC trades for more than target price ($1):

* Users deposit collateral and mint $USC
* Users then sell $USC at higher price on the open market
* Price gradually decreases back to peg

If $USC trades for less than target price ($1):

* Users buy $USC at a lower price on the open market
* Users repay their debt at parity value
* Price gradually increases back to peg<br>

Over time, these actions naturally bring the peg back to 1:1 and reinforces the validity of the soft peg.

## Price ceiling

Intrinsically, $USC has a price ceiling of $1.35. Since the protocol currently has a [Minimum Collateralisation Ratio](https://doc.orby.network/overview/supported-collateral/collateral-risk-parameters) of 135%, anytime USC trades above $1.35, users can take out a minimum loan on their collateral to borrow $USC and sell it on the market. Even if a liquidation occurs they make a profit of the price difference between the market and $1.35.

<figure><img src="https://2913283598-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FnM953569lZ20u1dw1aCu%2Fuploads%2FwsfRDgnVmmSc7eZQPzLu%2FScreenshot%202024-02-08%20at%2011.11.46%20AM.png?alt=media&#x26;token=1939617f-a0f9-4cd2-8742-44eb8c57a019" alt=""><figcaption></figcaption></figure>

## Further mechanisms

In order to influence $USC’s stability in a more direct manner and enact a more active price floor, Orby has mechanisms in place to bring the price of $USC back to peg which includes:

* [the Base Rate](https://doc.orby.network/overview/usduscs-peg-stability-and-redemptions/base-rate)
* [the Redemption Mechanism](https://doc.orby.network/overview/usduscs-peg-stability-and-redemptions/redemption-mechanism)\*