Peg Stability Risk Management

While the greatest element of peg stability is over-collateralization and solvency of the system at all times, during the periods of time when the products of StableUnit experience demand or supply shocks, peg stability can be affected greatly, making the products of StableUnit unattractive or simply uneconomical to use.

Most of the exposure of users of StableUnit products to the risks associated with peg stability risks we are addressing in this section of Risk Management framework are induced by short-term and mid-term supply and demand shocks.

Peg Stability-related Risk Exposure.

Applied in the context of StableUnit, introduces a unique risk exposure up to a maximum amount of outstanding debt backed by such collateral.

Each product introduces its unique exposure (for example 2% peg exposure for EURO Pro is $1M + Exposure from token USD Pro is $2M):

Outside of deep liquidity pools, StableUnit introduces several novel Risk Mitigation, and Risk Transfer mechanisms to treat peg stability risk induced by short-term and mid-term supply and demand shocks.