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Overview

trUSD is designed to track the value of USD, targeting a price of $1.00. The peg is maintained through economic incentives that make it profitable for market participants to correct any deviations.

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How the Peg Works

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The Core Mechanism

trUSD’s peg stability relies on arbitrage incentives. When trUSD trades away from $1.00, market participants can profit by helping restore the peg:
What happens:
  1. trUSD is trading above $1.00 on the open market (e.g., $1.02)
  2. Verified participants can mint new trUSD from the protocol at NAV (~$1.00)
  3. They sell the newly minted trUSD on the open market at $1.02
  4. This increases trUSD supply and pushes the price down toward $1.00
  5. The arbitrageur profits from the difference
Result: Market price is pushed back down toward $1.00
What happens:
  1. trUSD is trading below $1.00 on the open market (e.g., $0.98)
  2. Verified participants can buy trUSD cheaply on the open market
  3. They redeem trUSD with the protocol at NAV (~$1.00)
  4. This decreases trUSD supply and pushes the price up toward $1.00
  5. The arbitrageur profits from the difference
Result: Market price is pushed back up toward $1.00

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Why This Works

The key insight: as long as backing is maintained, any price deviation creates a profit opportunity.
Why deviations get corrected: If trUSD trades at $0.98 but the backing supports $1.00, anyone who buys at $0.98 and redeems at $1.00 earns a 2% profit. This economic incentive naturally attracts capital to correct the deviation.

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Market Price vs NAV

Understanding the difference:

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Normal Conditions

During normal market conditions:
  • Market price stays very close to NAV
  • Small deviations are quickly corrected by arbitrageurs
  • Typical deviation: < 0.5%

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During Volatility

During volatile periods, temporary deviations may occur. However:
  • Deviations create opportunity - The further price moves from NAV, the more profitable arbitrage becomes
  • Self-correcting mechanism - Economic incentives pull price back toward NAV
  • Protocol participation - The protocol itself may participate in arbitrage to restore the peg
Temporary deviations from $1.00 are normal during volatile markets and typically resolve as arbitrageurs capture the profit opportunity.

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Supporting Mechanisms

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Liquidity Provision

Deep liquidity in trUSD trading pairs:
  • Reduces price impact of trades
  • Enables efficient arbitrage
  • Minimizes slippage for users

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Protocol Operations

The protocol actively supports peg stability through:
  • Working with liquidity providers
  • Monitoring market conditions
  • Participating in arbitrage when beneficial

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Growing Adoption

As adoption grows:
  • More arbitrageurs participate
  • Deeper liquidity develops
  • Faster peg restoration

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Peg Stability Factors

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What Happens If Price Deviates?

Short answer: Profit opportunities emerge that naturally correct the deviation. The protocol and external participants both benefit from restoring the peg, creating aligned incentives for stability.

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Transparency

Real-time data on trUSD pricing and backing is always available:

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Important Note

While the peg mechanism is designed to be robust, trUSD may trade above or below $1.00 at times. The key assurance is that as long as the protocol maintains its backing, economic incentives work to restore the peg. See Backing & Reserves to understand how backing is maintained.

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Next Steps

Backing

How trUSD is backed

Reserve Fund

Additional protection layer

Get Started

Start using trUSD

Risks

Risk disclosures