Protecting The Peg
REFI2 maintains a 1:1 peg to USD through a combination of overcollateralization, reserve management, and structured risk controls.
Overcollateralization
Every REFI2 token is backed by 102%+ in secured real estate assets.
This buffer provides protection against market volatility and ensures the underlying collateral value exceeds the token supply.
- •Minimum collateralization ratio: 102%
- •Regular monitoring and rebalancing of collateral positions
- •Automatic adjustments when collateralization falls below threshold
Liquidity
Reserve pools maintain sufficient liquidity to process redemptions and support market stability.
Liquidity reserves are funded from yield distributions and are maintained at target levels to ensure immediate redemption capacity.
- •Reserve targets based on historical redemption patterns
- •Dynamic adjustment of reserve levels based on market conditions
- •On-demand redemption without lockup periods
Arbitrage
Market mechanisms incentivize price stability through arbitrage opportunities.
When REFI2 trades below peg, arbitrageurs can purchase tokens and redeem them at full value, restoring the peg. When trading above peg, new token issuance provides supply to bring price back to equilibrium.
Reserves
Multiple reserve layers provide additional stability buffers beyond the minimum collateralization requirement.
Reserve funds are allocated from yield surpluses and serve as a first line of defense against temporary market dislocations or redemption spikes.
Risk Controls
The protocol implements multiple layers of risk controls to maintain peg stability:
- •Continuous monitoring of collateralization ratios with automated alerts
- •Stress testing of reserve adequacy under various market scenarios
- •Circuit breakers that can temporarily pause redemptions in extreme conditions
- •Graduated response protocols that activate additional protections as conditions deteriorate