Peg Stability Module

What is the Peg Stability Module?

The Peg Stability Module (PSM) is one of the few mechanisms offered by Neptune to help further ensure that USDN stays pegged to a dollar. The PSM allows users to swap USDN for USDC and vice versa at a fixed rate.

Unlike the traditional Neptune vaults, the PSM has no borrowing mechanism. The contract simply swaps the coins directly and collects a fee at the point of transaction.

When can the module be used?

It is helpful where USDN is trading above a dollar. Users can simply take advantage of the arbitrage opportunity by minting USDN from USDC. This in turn will help bring the price of USDN down closer to a dollar.

Likewise, in the event that USDN is trading below a dollar, users can redeem their USDN for USDC to take advantage of the arbitrage opportunity which eventually helps to revert USDN back up to a dollar.

Do note that there is a capped amount that the peg stability module can hold.

What are the fees involved?

• To mint USDN from USDC - 0.75%

• To redeem USDN to USDC - 0.1%