Stability Fund

Functions

When the supply of PUSD in a specific market (such as ETH/USD) exceeds the long positions excessively, the Stability Fund will implement the Active Redemption Mechanism:

The Stability Fund directly buys back PUSD or purchases USDC, then uses the Peg Stability Module (PSM) to mint PUSD on a 1:1 basis with USDC. Those PUSD are subsequently burned, thereby reducing the supply of PUSD in this market and restoring balance.

Income Sources

1. Liquidation fees: Liquidation clearance fees (2%) are collected when users’ positions are forcibly liquidated.

2. Price impact fees.