Price Stability

Fantom

The main pillar of price stability comes from the possibility of redeeming FTMX token for the value of FTM. In other words, FTMX is 1:1 pegged to the price of FTM.

Another mechanism to support the price peg is the arbitrage opportunity offered by the minting and redeeming functions.

FTMX is under peg

If the value of FTMX token is less than the value of 1 FTM, then anyone can purchase it on the open market and redeem it for approximately the value of 1 FTM worth of value when there is a profitable arbitrage opportunity.

FTMX is over peg

If the value of FTMX token is more than the value of 1 FTM, then anyone can mint it with the protocol for approximately the value of 1 FTM worth of value and sell it on the open market when there is a profitable arbitrage opportunity.

Avalanche

The main pillar of price stability comes from the possibility of redeeming fAVAX token for the value of AVAX. In other words, fAVAX is 1:1 pegged to the price of AVAX.

Another mechanism to support the price peg is the arbitrage opportunity offered by the minting and redeeming functions.

fAVAX is under peg

If the value of FTMX token is less than the value of 1 FTM, then anyone can purchase it on the open market and redeem it for approximately the value of 1 FTM worth of value when there is a profitable arbitrage opportunity.

fAVAX is over peg

If the value of fAVAX token is more than the value of 1 AVAX, then anyone can mint it with the protocol for approximately the value of 1 AVAX worth of value and sell it on the open market when there is a profitable arbitrage opportunity.