Aqua Protocol
  • Background
    • Introduction
    • Welcome to the World of LSTs
    • Stablecoins on the Market
    • Lending Through Issuing Stablecoins
    • Aqua, the Home of all LSTs
    • TON Ecosystem benefits with Aqua
  • Mechanisms
    • How it works
    • Minting (Borrowing)
    • Repayment
    • Withdrawal
    • Redeem
    • Liquidation
    • Fee model
    • Special parameters
  • Stability and peg mechanisms
    • Stability and Peg Mechanisms in Aqua Protocol
    • Stability pool for AquaUSD under 1 dollar and liquidations.
    • Arbitrage through Redeem if for AquaUSD goes below 1 dollar.
    • Keepers
  • Governance
    • AQUA: The Utility Token of Aqua Protocol & How to Earn an Allocation (AquaXP & AquaRP)
    • Aqua DAO
  • Supplement
    • Roadmap
    • FAQ
    • Security Audits
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  1. Stability and peg mechanisms

Arbitrage through Redeem if for AquaUSD goes below 1 dollar.

Automated Arbitrage Bot Algorithm for AquaUSD below 1 dollar.

Arbitrage Conditions Definition

  • Arbitrage Condition: AquaUSD must trade below 1 dollar.

  • Target Purchase Price of AquaUSD: Purchase AquaUSD when 1 AquaUSD costs less than Price of USDT - (Price of USDT * Redemption fee).

Execution of Arbitrage Operation

Step 0: Calculate Required USDT in Dedust Stable-Swap Pool

  • Determine how much USDT is needed in the Dedust Stable-Swap Pool to stabilize AquaUSD to $1.

  • Calculate the corresponding amount of TON needed

Step 1: Purchase USDT on TON

  • Using DEX: Utilize StonFi or Dedust for exchanging TON to USDT in the Volatile Pool (find the best price).

  • Exchange Formula in Volatile Pool (Constant Product): x * y = k, where x and y are balances of TON and USDT, respectively.

Step 2: Exchange USDT to AquaUSD

  • Using Dedust Stable-Swap Pool: Exchange USDT to AquaUSD in Dedust Stable-Swap Pool.

  • Exchange Formula in Dedust Stable-Swap Pool: x^3 * y + y^3 * x = k, where x and y are balances of USDT and AquaUSD, respectively.

Redeem AquaUSD

  • Select Vault for Redeem: Choose a Vault with the lowest Collateral Ratio (CR) for exchanging AquaUSD to a fixed rate of TON in Redeem Aqua.

Automatic Unstaking and Reinvestment

  • Unstake and Reinvest: Automatically unstake the received TON and reinvest them back into the arbitrage pool for future operations.

Planned Features for Version 2

  • LP Tokens: Anyone could participate. Users receive LP tokens in exchange for their investments in the arbitrage pool. These tokens grant access to rewards for staking TON.

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Last updated 8 months ago