# How PUSD Maintains Stability

By integrating with decentralized perpetual contracts, Pure.cash achieves a unique mechanism: when users mint PUSD using ETH, the on-chain smart contract simultaneously opens an equivalent short position using the same ETH as collateral. This approach maintains PUSD's delta neutrality, shielding it from underlying asset volatility and ensuring perpetual stability.

The intrinsic value of PUSD can be described by the following formula (using ETH, for example):

1 PUSD = $1 of ETH + Short $1 of ETH/USD Inverse Perpetual Contract

For a deeper understanding of the principles behind the above formula for maintaining stability, refer to this article by Bitmex founder Arthur Hayes: https://blog.bitmex.com/dust-on-crust/

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