How NECT Maintains PEG

$NECT is meticulously engineered to maintain close parity with the US Dollar. This is achieved through intricate hard and soft peg mechanisms:

• Hard Peg Mechanisms: These involve direct methods that establish both a price floor and ceiling for NECT. The redemption feature, where $NECT can be exchanged for collateral assets at face value (1 $NECTequates to $1 of collateral asset), coupled with a minimum collateral ratio, facilitates arbitrage opportunities. These mechanisms are vital in preserving $NECT price stability.

• Soft Peg Mechanisms: These indirect methods also contribute to maintaining USD parity. $NECT is treated as equivalent to $1 within Beraborrow, establishing an inherent equilibrium in the protocol. Additionally, the borrowing fee structure adjusts dynamically with fluctuating redemption rates. For instance, as the redemption rate increases (indicating $NECT's value falling below $1), the baseRate increases accordingly, thus curbing the issuance of new $NECT and stabilising its value.

The arbitraging universally available to any user through $NECT flash loans.