How asUSD balances to $1
The responses to mis-priced asUSD
asUSD maintains its peg through three independent mechanisms, each reinforcing the others, creating a system that gets stronger under pressure.
1. Predictive Rate Control
Preventing Deviations Before They Happen
The Innovation: Monitor Liquidity, Not Price
Traditional stablecoins wait for price breaks, then react. asUSD watches liquidity flows and adjusts the costs of borrowing to prevent breaks.
How It Works:
Pool Target: 50% asUSD / 50% USDC
Current: 60% asUSD / 40% USDC
Signal: Excess asUSD supply
Response: Rates increase immediately
Result: Price never deviatesThe Math:
Error Signal = Target Reserve Ratio - Current Reserve Ratio
Rate Adjustment = Controller Function(Error Signal)
Time to Response: Next block (~2 seconds on Linea)
Real Example:
When $5M asUSD enters a $100M pool:
Reserve ratio shifts from 50/50 to 55/45
Controller detects 5% imbalance
Interest rates increase proportionally
Borrowing becomes expensive
Supply contracts naturally
Balance restores without price impact
2. Economic Arbitrage
Making Stability Profitable
When asUSD < $1.00
The Opportunity:
Market price: $0.98
Repayment value: $1.00
Instant profit: 2%
The Play:
Buy 100,000 asUSD for $98,000
Repay your Astera loan at face value
Pocket $2,000 profit
Your buying restored the peg
When asUSD > $1.00
The Opportunity:
Minting cost: $1.00
Market price: $1.02
Instant profit: 2%
The Play:
Deposit collateral to Astera Lend
Mint 100,000 asUSD at exactly $1.00
Sell for $102,000
Pocket $2,000 profit
Your selling restored the peg
Why This Always Works:
No permission needed
No capital requirements (use flash loans)
Profit guaranteed by smart contracts
Someone will always capture it
3. Staking Reinforcement
Yield That Supports Stability
The Feedback Loop
How Staking Strengthens the Peg:
High Demand Scenario:
Borrowing rates: 20% APR
Flows to stakers: 20% APR
Result: Users buy asUSD to capture yield
Effect: Buying pressure maintains $1.00
Low Demand Scenario:
Borrowing rates: 5% APR
Natural equilibrium level
No artificial incentives needed
System finds balance organically
Last updated