Stable Jack
  • Introduction to Stable Jack
    • Introduction to Stable Jack
    • Why Do the Markets Need Stable Jack?
    • The Mechanism Behind Stable Jack
      • Technical Explanation of the Mechanism
  • Stable Jack v2
    • Why We're Building Stable Jack v2
    • Introduction to Yield Token (YT)
    • Introduction to Volatility Token (VT)
    • Introduction to Points Token (PT)
    • New Features Coming with the v2
    • Competitor Analysis
    • What Use Cases does Stable Jack offer?
    • How Stable Jack Creates New Demand: The BENQI Case Study
    • Risk Management
    • Additional Information
  • Audits
  • Stable Jack v1
    • Stable Jack v1
      • System Stability
      • Risk Management
        • Level 1 - Stability Mode Mint/Redeem Controls
        • Level 2 - Rebalance Pool
        • Counter-Party Risk Management
      • Calculations
      • FAQ
        • The Difference Between aUSD and UST
      • Contract Adresses
  • $JACK Tokenomics
    • The Death of Airdrops: Discount Tickets as a New Paradigm
      • The Solution: Discount Tickets
      • The Case for Discount Tickets
      • Comparison: Discount Tickets vs Airdrops?
    • $JACK Token
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  1. Stable Jack v1
  2. Stable Jack v1
  3. Risk Management

Counter-Party Risk Management

  1. What happens if there’s a huge flash crash in AVAX price?

In the rare scenario of a substantial AVAX price crash where the rebalancing pool and minting incentives prove ineffective in restoring system stability, the value of xAVAX can potentially plummet to zero. In such a situation, aUSD would have sole claim on the reserve. If this occurs, the NAV of aUSD would no longer remain stable but would instead mirror the complete price fluctuations of AVAX. Nonetheless, aUSD would still be redeemable.

  1. What happens if sAVAX depegs from AVAX?

The protocol incorporates an automatic emergency mechanism designed to safeguard holders of aUSD and xAVAX in the event of a potential sAVAX depegging. Utilizing multiple oracle feeds, the protocol monitors whether the price of sAVAX has deviated by more than 1% from the price of AVAX. If such a deviation occurs, the minting and redemption functions are temporarily disabled

Once the sAVAX peg stabilizes, minting and redemption are reactivated. This mechanism serves to protect aUSD and xAVAX holders and eliminates the need for immediate intervention in the event of an sAVAX depeg.

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Last updated 8 months ago