> For the complete documentation index, see [llms.txt](https://tedra-usd-usd-t.gitbook.io/tedra-usd-the-stablecoin-that-does-more./llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://tedra-usd-usd-t.gitbook.io/tedra-usd-the-stablecoin-that-does-more./price-stability-mechanism.md).

# Price Stability Mechanism

Peg management is enforced through two mechanisms:

1. **Dynamic Reserves**\
   All reserve balances are published on-chain, tracked in real-time. These include:
   * USD cash equivalents (audited banks)
   * On-chain treasuries (tokenized U.S. T-bills)
   * High-grade lending protocols (low-risk DeFi pools)
2. **Market Incentives**\
   In extreme scenarios (depeg or liquidity squeeze), users are incentivized to arbitrage, stake, or participate in rebalancing vaults that restore peg through programmatic buy/sell mechanics.

USD.T does not rely on unchecked minting or overcollateralized leverage to maintain parity.