Core Stability Framework

Astonic revolutionizes the creation and exchange of crypto assets pegged to various value references:

• Fiat currencies (e.g., USD, EUR)

• Commodity baskets (e.g., gold and oil combinations)

• Custom price indices (e.g., an index tracking renewable energy prices)

The protocol operates as an over-collateralized, decentralized, and transparent stable asset system, backed by a robust crypto reserve.

Exchange Mechanism Explained

How It Works:

1. Supply Expansion:

   • Users deposit collateral assets worth one reference unit

   • Example: A user deposits $100 worth of $PLQ as collateral.

   • Receive one stable asset in return

   • Example: In exchange, the user receives 98 USD-pegged stablecoin (e.g., aUSD).

   • Reserve maintains collateralization

   • Example: The reserve ensures the $100 worth of $PLQ stays locked, maintaining over-collateralization to safeguard the stability of the $1 aUSD.

2. Supply Contraction:

   • Users send one stable asset

   • Example: A user sends back 1 USD-pegged stablecoin (e.g., $1 aUSD).

   • Receive equivalent collateral value

   • Example: In return, the user gets $1 worth of PLQ or other collateral assets, depending on the reserve.

   • System automatically adjusts supply

   • Example: The protocol burns the returned stablecoin, reducing the overall supply and maintaining the balance between assets and reserves.

Market Dynamics Example

Here’s how Astonic Dollar works to maintain its $1 peg:

When Price Is Above Peg ($1+):

• Arbitrage opportunity arises: If the market price of Astonic Dollar rises above $1 (e.g., $1.05), traders can take advantage.

• Purchase $1 worth of Planq/USDC: Arbitrageurs buy $1 worth of Planq or USDC and deposit it into the system.

• Exchange for $1 Astonic Dollar: They mint 1 Astonic Dollar for $1 worth of collateral.

• Sell Astonic Dollar at the higher market price: The arbitrageurs sell the Astonic Dollar on the open market for $1.05, making a profit of $0.05.

• Price returns to $1: As more Astonic Dollars enter the market, the increased supply pushes the price back down to $1.

When Price Is Below Peg ($1-):

• Astonic Dollar is cheaper than $1: If the market price drops below $1 (e.g., $0.95), traders see an opportunity to profit.

• Purchase Astonic Dollar at the lower market price: Arbitrageurs buy Astonic Dollars at $0.95.

• Exchange for $1 worth of collateral: They redeem 1 Astonic Dollar in the system for $1 worth of collateral (e.g., Planq or USDC).

• Sell the collateral at market rate: The arbitrageurs sell the collateral for $1, making a profit of $0.05.

• Price stabilizes back to $1: As Astonic Dollars are removed from circulation through redemption, the reduced supply helps the price rise back to $1.

This mechanism ensures that the Astonic Dollar remains stable around its $1 peg by incentivizing traders to balance supply and demand.