Peg Stability

Mechanisms that keep USDQ anchored to $1

Multi-Layered Peg Stability Design

USDQ maintains its peg to the US dollar through a robust, multi-pronged approach, combining overcollateralization, delta-neutral strategies, and open-market arbitrage opportunities.

1. Delta-Neutral Collateral Management

Collateral assets deposited to mint USDQ are actively deployed into delta-neutral or market-neutral strategies, which:

  • Reduce directional exposure to market volatilityï¼›

  • Ensure underlying asset price movements do not destabilize USDQï¼›

  • Maintain consistent, risk-adjusted backing regardless of macro trends。

By minimizing reliance on any single asset’s price trajectory, the system ensures that USDQ remains fully collateralized and independent of market swings.

2. Overcollateralization Buffer

USDQ enforces strict overcollateralization requirements for all non-stablecoin mints. This ensures that each unit of USDQ is backed by assets whose market value exceeds the issued amount, creating a built-in buffer against volatility.

  • See: Overcollateralization

3. Cross-Market Arbitrage

To support peg stability in open markets, USDQ allows arbitrage flows across centralized and decentralized exchanges. Users can participate in maintaining the peg by taking advantage of price deviations.

If USDQ trades above $1.00:

  • Verified users can mint USDQ at $1.00 via the protocolï¼›

  • Then sell USDQ on external markets at a premiumï¼›

  • Arbitrage pressure drives the price back down toward $1.00。

If USDQ trades below $1.00:

  • Verified users can buy discounted USDQ on external marketsï¼›

  • Then redeem it for $1.00 worth of collateral from the protocolï¼›

  • Redemption demand drives the price back up to peg。

This incentive structure enables permissioned arbitrage participants to profit while supporting the protocol’s price stability — making USDQ resilient in volatile conditions.

USDQ’s peg mechanism is self-reinforcing, built on economic incentives and robust design — ensuring that the token holds its intended value across chains, strategies, and markets.

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