$USA: Argo's Stablecoin
$USA is a dollar-pegged stablecoin over-collateralized by yield-earning tokens deposited into Argo. $USA is valued at $1.00 when used for borrowing and repaying on Argo. $USA can be used like any other stablecoin.
When a user opens a vault and borrows, $USA gets minted and sent to the user's wallet. Argo then charges an interest rate on $USA debt, based on the type of yield-earning asset engine. When $USA debt is repaid, the initial loan amount of $USA is burned, and the accrued interest is paid to the protocol treasury.
Maintaining $USA's Peg
While $USA is always valued at $1.00 on Argo, it can trade off-peg in secondary markets. Three arbitrage scenarios exist, each with its own arbitrage opportunity to help bring the price back to peg:
- If $USA < $1.00, users who have $USA debt can buy it at a discount and repay their loans on Argo at a lower cost. This purchase will help increase $USA's price.
- If $USA > $1.00, users can borrow $USA from Argo and sell it for other stablecoins, securing a profit. This supply increase will help lower $USA's price.
- If $USA's price differs on two markets (e.g. if $1.01 on one and $0.99 on another) - users can buy it on the cheaper market and sell it on the pricier market. This will help balance peg across markets.
Since $USA's utility depends significantly on its liquidity, we plan to partner with leading AMMs/DEXs to list $USA pairs with other stablecoins and cryptoassets.