The most important feature of a stablecoin is to be able to keep its soft peg as closely as possible. To ensure USDX is de-risked and follows its $1 value, we’ve provisioned two mechanics.
If the price of USDX falls below its peg, users who have open USDX positions are incentivized to close out their positions. They will buy USDX at the lower price, from the market, to repay their loans and interest, which reduces the supply of USDX and brings it back to its peg.
When USDX trades above its peg, it creates an opportunity for arbitrage. Users can mint new USDX and sell it on the market for a profit, which will increase the token supply and return the price to its peg.