PSM (Peg Stability Module)

PSM (Peg Stability Module) is one of the majority ways of minting atETH. It will issue the same amount of atETH token given the pegging target asset. PSM as an AMO component of the protocol, receives grants from the protocol treasury directly.

With the fluctuation of markets, large amount of atETH minting is required. Such instance includes the high yield raising the demands of atETH, whales hoping to enter at a lower slippage, or the pegging target asset price varying swiftly. Under such circumstances, the base AMO will not response to the market as quickly as needed because it has strict restrict on the calling frequency and operation amounts due to security reasons.

However, the large fluctuation is the main income of the protocol. It is the protocol's aim to seize these opportunity - and here comes the PSM with fast and controllable minting of collateralized atETH tokens. It will response to the fast varying market for more profitable opportunities.

Key Features

PSM has several key features, include:

• Strong pegging. Minting atETH from pegging target asset with exact 1:1 rate regardless of slippage. The atETH tokens are minted with full collateral. No fees are charged at the current phase.

• Permission-less. Anyone can use it - including whales, users or trading bots - to increase the market of atETH.

• Strict Security. For security reasons, the PSM will not be granted the permission to mint and redeem atETH arbitrarily. It will be functional only when the price of atETH is higher than it's pegging target asset. When price is lower, the price is controlled by the basic AMO, and users can exit through our deep liquidity swap pairs.

• Boosted capital utilization. The asset used to swap for atETH will not be stuck in the PSM module. The fund will be sent to the Base AMO, providing deeper liquidity as well as making them collateral.