$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:

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

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 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.

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:

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