Parity Arbitrage Right (PAR)

Since the underlying USD0 for USD0++ is locked, there is no open arbitrage mechanism for when USD0++ is priced below USD0. To address this, the DAO can unlock the USD0 before the USD0++ matures if deemed necessary under DAO governance. This action allows USD0++ to be redeemable for its USD0 if the market price of USD0++ becomes depegged.

Market Valuation of USD0++

USD0 Liquid Bond Token has free market pricing. While the expected market fair value should be at parity, to ensure safety in the crypto space, the Usual DAO has the right to unlock a bond through the Parity Arbitrage Right (PAR).

PAR and Redemption Mechanism

The Usual protocol has a unique prerogative that allows it to unlock an USD0++ under specific conditions deemed beneficial by the protocol's governance. In instances where USD0++ is traded at a value significantly below its fair value, Usual can intervene by redeeming the bond. This arbitrage mechanism ensures that the protocol can maintain stability and protect the interests of its participants while making an instant profit for the treasury.