Atomic Peg Stability System (APSS)

BOUND becomes the first protocol to implement an atomic peg stabilization system on secondary markets that democratizes arbitrage profits traditionally captured by whitelisted arbitrageurs and returns them directly to holders.

The Atomic Peg Stability System (APSS) prevents price movement in the USDC/DFY liquidity pool by executing atomic counter-transactions that capture the arbitrage opportunity between the pool's trading price and the protocol's 1 USDC per 1 DFY primary market price. The system operates through real-time monitoring of the official DFY/USDC pool. Upon detecting a pending transaction, APSS calculates the exact price impact and executes an atomic counter-transaction within the same block to neutralize price deviation.

This atomic execution ensures the pool maintains price stability at exactly 1 USDC per DFY with accuracy to 7-8 decimal places, while capturing the arbitrage value that would otherwise be extracted by external MEV bots or institutional arbitrageurs.

Real Case Scenarios

The breakthrough lies in the truly atomic nature of the system: when a user initiates any trade in the DFY/USDC pool on Uniswap, the protocol's response occurs within that same transaction. If buying DFY would push the price above $1, the system mints new tokens and sells them into the pool, all before the user's transaction completes. If selling would drop the price below $1, the protocol buys and burns tokens instantaneously. The user experiences perfect $1 execution while the protocol captures the arbitrage profit that would have existed between their trade price and the peg.

This atomic execution revolutionizes stablecoin mechanics. Traditional stablecoins create price deviations that external arbitrageurs later correct in separate transactions, extracting value from the system. DFY eliminates this process entirely. Within a single atomic transaction, the system ensures instant price correction, removes reliance on third-party arbitrageurs, and retains arbitrage revenue instead of distributing it externally.

The mechanism operates through direct integration between the Uniswap pool and DFY’s minting engine, enabling instant supply adjustments that occur faster than any external arbitrageur could act. This isn't just automated, it's atomic, meaning the peg restoration is inseparable from the user's original transaction. The result is a pool that cannot trade away from $1, as every transaction self-corrects before completion.

Unlike traditional stablecoin arbitrage mechanisms that rely on external actors to restore pegs after price movements, DFY’s integrated system makes price deviation impossible. While other protocols leak value to MEV bots and institutional arbitrageurs who monitor and exploit price discrepancies, BOUND captures these opportunities within the protocol itself, converting arbitrage profits into additional collateral backing.

This atomic approach ensures perfect price stability, eliminates reliance on third-party arbitrageurs, and transforms every trade into a revenue-generating event for the protocol.

Atomic Peg Mechanism - Technical Specifications

How does it work

1

Price Above $1

Each user buy triggers instant minting and selling of DFY within the same transaction, capturing spread as protocol revenue.

2

Price Below $1:

Each user sell triggers instant buying and burning of DFY within the same transaction, using funds from APSS liquidity reserves.

3

Result

Every trade executes at exactly $1 while protocol captures all arbitrage value

Performance Metrics

• Execution: Atomic (same transaction as user trade)

• Price Deviation: Zero (mathematically impossible to trade away from $1)

• Value Capture: 100% of arbitrage profits retained by protocol

• Decentralized Operations: All operations are decentralized through Uniswap pools

Security Guarantees

• No manual intervention required or possible

• No dependency on external arbitrageurs

• Immutable smart contract logic