🪐 Cephei — cUSD stablecoin

🪐 Hello Cephei community!

Today we'll explain how our stablecoin is working and why it’s price will be always at 1$.

🟡 What are stablecoins?
Unlike traditional cryptocurrencies like Bitcoin or Ethereum, whose price can move significantly, stablecoins are pegged to assets with the lowest volatility (such as the US dollar or gold).

Traders can quickly convert cryptocurrency into stablecoins to protect their investments. Cephei protocol creates its own hypercollateralized stablecoin, cUSD, as a borrowing token.

🟡 Core mechanics for stabilisation of cUSD
Why our stable will be always at 1$ price?
Cephei protocol solves peg question with the most sustainable way - make peg profitable. Let's look at examples:

When the price of cUSD > 1$ - it is profitable to open new credits and sell just received cUSD for another stablecoin and this selling process would push the price of cUSD down to 1$.

If price of cUSD < 1$, then it is profitable to buy cUSD from the market to close the credits and this buiyng process would also push the price of cUSD up to 1$.

🟡 Redemption mechanism
Redemption is an algorithm when for 1 cUSD you can always get 1$ of collateral tokens.

For example, get $1 in TON equivalent in exchange for 1 cUSD, and this $1 of collateral will be taken from the position with the lowest HF (the closest one to liquidation), thereby protecting the loan from liquidation and executing the exchange itself.

But, like any medicine, this mechanic in large quantities is poison and kills the system, so we decided to make a deactivable buyback that will be included only in emergency situations (ideally - never) and is guaranteed to restore the binding.

🪐 Our resources:
Cephei-App | Landing | CIS Channel | Eng Community | X | NFT