Peg Stability Mechanism
ELUSD maintains price stability through a mint–redeem arbitrage design.
When the market price deviates from the 1 USDT reference, arbitrage incentives naturally pull the price back toward parity.
Upper cap
(Price > 1 USDT)
Users mint ELUSD at 1 USDT and sell on the market
Supply increases → downward price pressure
Lower floor
(Price < 1 USDT)
Users buy ELUSD below par and redeem for 1 USDT
Supply decreases → upward price pressure
This structure enables a market-driven, decentralized peg without centralized intervention.
Peg Band
In real trading environments, factors such as redemption wait times, spreads, fees, and liquidity mean the market price may not always be exactly 1 USDT.
Reflecting these practical conditions, ELUSD is designed to maintain stability within an operational tolerance band of 0.995 – 1.005 USDT under normal market conditions.
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