How asUSD Maintains $1.00

The Stability Trinity

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 deviates

The 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:

1. Reserve ratio shifts from 50/50 to 55/45

2. Controller detects 5% imbalance

3. Interest rates increase proportionally

4. Borrowing becomes expensive

5. Supply contracts naturally

6. 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:

1. Buy 100,000 asUSD for $98,000

2. Repay your Astera loan at face value

3. Pocket $2,000 profit

4. Your buying restored the peg

When asUSD > $1.00

The Opportunity:

• Minting cost: $1.00

• Market price: $1.02

• Instant profit: 2%

The Play:

1. Deposit collateral to Astera Lend

2. Mint 100,000 asUSD at exactly $1.00

3. Sell for $102,000

4. Pocket $2,000 profit

5. 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

Demand Rises → Rates Increase → Staking APR Rises → 
Users Buy asUSD to Stake → Demand Satisfied → 
Rates Normalize → Sustainable Equilibrium

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