How Depeg Protection Works

Depeg protection functions in the following ways:

1. Real-Time Monitoring:

• Voyage’s AI-powered engine continuously monitors the price of assets in the pools to detect any deviations from the pegged value. This is achieved by comparing the market price of the asset to its intended peg, using a predefined threshold (e.g., if a USD-pegged stablecoin trades more than 2% away from $1).

2. Threshold Alerts:

• Once an asset crosses a predefined depeg threshold (for example, if a USD-pegged stablecoin drops below $0.98 or rises above $1.02), the depeg protection mechanism is triggered. This ensures that action is taken swiftly, without waiting for manual intervention.

3. Dynamic Swapping:

• Upon detecting a depeg event, the protocol automatically swaps the affected asset into more liquid and stable pools. For instance, if a stablecoin like USDC depegs from the dollar, the protocol might automatically swap it into a pool with DAI or another asset that is maintaining its peg more closely.

• The swapping process is designed to minimize slippage and ensure users’ capital is protected in more stable pools while avoiding volatile or illiquid markets.

4. Rebalancing:

• Once the assets are swapped into more liquid pools, the AI engine will periodically check if the original asset has returned to its peg. If so, the protocol can reallocate user assets back into the optimized pool to maximize returns.

5. Risk Mitigation:

• In cases where market conditions become extremely volatile or multiple assets experience depegging simultaneously, Voyage will prioritize stability by allocating assets into highly liquid, low-risk pools. This reduces exposure to extreme market fluctuations and protects users’ capital.