> For the complete documentation index, see [llms.txt](https://docs.usdx.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usdx.money/a-synthetic-usd/peg-arbitrage-mechanism.md). # Peg Arbitrage Mechanism Subject to successful whitelisting of address for minting right, there is a trading strategy for users to capitalize on the discrepancy between the market price of *USDX* and the real value. * Cross-market arbitrage: buy or sell *USDX* and mint or redeem with contract when market price of *USDX* deviates from its pegged value of $1 ## Trading Strategies Key considerations include: * *USDX* is entirely backed by the protocol’s reserve assets. * *USDX* can be minted and redeemed on demand, allowing approved participants to seamlessly transition between *USDX* and their digital asset of choice. * The valuation and quantity of the collateral backing *USDX* remain stable, unaffected by price volatilities or dislocations across any Centralized/Decentralized Spot Market, Automated Market Maker (AMM) Protocols, and beyond. * Even in turbulent markets leading to liquidity crunches, the collateral value supporting *USDX* remains stable. ### Cross Market Arbitrage This approach permits any authorized individual to mint or redeem, benefiting from the price/quantity discrepancy between the minting/redeeming rate of *USDX* with usdx.money and its trading price in external markets. External markets encompass both centralized and decentralized spot markets like "*USDX/USDC/USDe*" and AMM platforms such as Uniswap or Curve.
Should *USDX* be undervalued in an external market compared to usdx.money, a user could: 1. Buy 1x *USDX* at $0.95 using *USDT,* *USDC or USDe*. 2. Redeem 1x *USDX* at $1.00 through usdx.money, receiving *USDT* in return. 3. Realize a profit. Conversely, if *USDX* is overvalued in the external market compared to usdx.money, a user could: 1. Mint *USDX* by depositing *USDT, USDC or USDe* with usdx.money. 2. Sell newly minted *USDX* for more than $1.00 in USDT or USDC. 3. Realize a profit.