Soft-Pegging to the US Dollar

Soft-Pegging of FXD's market price to $1 is assisted by StableSwapModule. This section explains StableSwapModule's pegging mechanism

How pegging works

When the market price of FXD is less than $1, the StableSwapModule (SSM) provides an incentive to buy FXD. The below images show how the FXD price is pegged from time 0 to time 2.

When the market price of FXD is greater than $1, it provides an incentive to sell FXD in the market. The below images show how the FXD price is pegged from time 0 to time 2.