Peg Stability

USDLR's peg to the U.S. Dollar is maintained by market makers and trading firms.

Market makers and trading firms that have Stable accounts help maintain USDLR's peg to the U.S. Dollar by taking advantage of arbitrage opportunities, which results in the rebalancing of the supply and demand of USDLR in the market.

For example, if USDLR is trading at $1.01 on the secondary market due to high demand, market makers can mint USDLR for exactly $1 and make a profit of $0.01 by selling for $1.01. Minting more USDLR increases the supply and brings the price back down to $1.

If USDLR is trading $0.99, market makers can buy USDLR for $0.99 and make a profit of $0.01 by redeeming for exactly $1. Redeeming USDLR reduces the supply and brings the price back up to $1.