Protocol
Stability
Two mechanisms keep gynUSD honest: liquidations keep every token fully backed, and redemptions anchor it to the dollar. Both run on their own, through any market.
Liquidations
Every gynUSD is minted against cbBTC collateral. If Bitcoin's price falls far enough that a position no longer carries the required collateral backing, the protocol liquidates it: the debt is settled and the collateral is claimed. That hard rule is what lets gynUSD stay fully backed and redeemable at all times.
The backstop
The Stability Pool is the liquidation backstop: staked gynUSD stands ready to absorb liquidated debt. A deeper pool means a stronger backstop, which is why 70% of borrower interest flows there — the protocol pays its safety net first. Stakers, in turn, earn from the borrowers they insure.
What borrowers should know
- Keep a buffer. 90.91% is the maximum LTV, not a target. Most borrowers mint well below it so ordinary volatility never threatens their position.
- Watch your position. Your collateral ratio moves with the BTC price; topping up collateral or repaying debt raises your safety margin.
- The rules never change. Liquidation mechanics are part of the immutable core: no governance can move the goalposts mid-loan.
Redemptions
A redemption swaps gynUSD for one dollar of BTC value, directly through the protocol. Anyone can do it, at any time, with no permission and no central party involved. The mechanism is part of the immutable core: no governance action can suspend it, and collateral is never rehypothecated, so the BTC backing every redemption is always where the contracts say it is.
How the peg holds
If gynUSD trades below $1 on the open market, arbitrage takes over: buy discounted gynUSD, redeem it for a full dollar of BTC value, and pocket the difference. That buying pressure pushes the price back toward the peg — no intervention, no market makers on retainer, just an open incentive. The Stability Pool reinforces the same direction by pulling gynUSD off the open market.