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What is OD?



OD is Open Dollar’s robust and over-collateralized stablecoin backed by LSTs and other Arbitrum-native assets. Its $1.00 floating peg is maintained by the protocol’s algorithm which adjusts it’s redemption rate by repricing debt, incentivizing vault managers to take actions to restore its value.

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  • Stable Value: Pegged to $1.00 for consistency and predictability in transactions.
  • Over-Collateralization: Backed by an excess in collateral value, enhancing security.
  • Algorithmic Price Stability: OD's uses a dynamic control system called a PID controller, which continuously adjusts the redemption rate to maintain its $1.00 floating peg to the USD.
  • Arbitrage Opportunities: When OD's market price deviates from its $1.00 peg, the system's adjustments create arbitrage opportunities to restore it. This encourages users to buy or sell OD to realign its market price with the intended peg which benefits individual traders and the overall stability of the token.
  • Decentralized Nature: OD's decentralized framework diminishes reliance on centralized custodians, reducing risks associated with centralized control and enhancing the security and transparency of users' assets.