Arbitrage

Arbitrage as a Core Pillar of DUSD Stability

Incentivized Market Operations

The stability of DUSD is reinforced by an efficient arbitrage mechanism that leverages market-based incentives to align the token’s trading price with its $1 target. Privileged arbitrage participants are empowered to act when DUSD deviates from its peg, helping restore equilibrium through capital deployment in both on-chain and centralized venues.

1

Arbitrage When DUSD Trades Above $1.00

When DUSD trades at a premium in external markets — above the $1.00 peg — authorized users can deposit USDT directly into Delta Money at a 1:1 ratio and mint new DUSD. These tokens are then sold at higher prices across trading venues, such as decentralized exchanges and major centralized platforms.

This inflow of new DUSD increases circulating supply and applies downward pressure on the price, naturally guiding it back toward the peg.

2

Arbitrage When DUSD Trades Below $1.00

In cases where DUSD trades below its $1.00 anchor, arbitrageurs purchase DUSD on external markets at a discount and redeem it through Delta Money for 1 USDT per DUSD. This creates a profit opportunity while also reducing DUSD’s supply.

The resulting contraction in circulation supports upward pressure on the token’s market price, realigning it with the peg.

Execution Infrastructure

All arbitrage transactions are conducted in real time and supported by robust operational oversight. Price inputs are validated through secure oracle feeds to prevent manipulation, and redemptions or minting are processed through permissioned channels to ensure integrity and accountability.

Arbitrage participants are selected based on their ability to act at scale and in alignment with the peg’s long-term defense.