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Peg Stability Module

What is the Peg Stability Module?

The Peg Stability Module (PSM) is one of the few mechanisms offered by Hedge to help further ensure that USH stays pegged to a dollar. The PSM allows users to swap USH for USDC and vice versa at a fixed rate.
Unlike the traditional Hedge vaults, the PSM has no borrowing mechanism. The contract simply swaps the coins directly and collects a fee at the point of transaction.

When can the module be used?

It is helpful where USH is trading above a dollar. Users can simply take advantage of the arbitrage opportunity by minting USH from USDC. This in turn will help bring the price of USH down closer to a dollar.
Likewise, in the event that USH is trading below a dollar, users can redeem their USH for USDC to take advantage of the arbitrage opportunity which eventually helps to revert USH back up to a dollar.
Do note that there is a capped amount that the peg stability module can hold.

What are the fee involved?

  • To mint USH from USDC - 0.75%
  • To redeem USH to USDC - 0.1%