> For the complete documentation index, see [llms.txt](https://docs.resupply.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.resupply.finance/resupply-protocol/stability-mechanics.md).

# Stability Mechanics

Resupply uses a redemption model for maintaining the stability of the reUSD stablecoin. The redemption model only maintains a price floor of $1 minus a small redemption fee, that is configurable by the DAO. If the reUSD depeg were to move upwards, this would be beneficial as it would encourage more borrowing. A 1% fee will be used for redemptions, allocating 0.8% to the borrower and the remaining 0.2% to the protocol.\
\
**Note:** If crvUSD depegs upward and is worth $1.05 instead of $1.00, the redemption fee increases by 5%. The same applies to frxUSD—if it continues to depeg upward, the redemption fee rises by the same percentage as the depeg amount.

Unlike other redemption models Resupply redemption model is communal, affecting not just a single user but the entire lending pool.  Redeemer may choose which pools will be redeemed against, but a weighted discount will be used to encourage which pools to redeem against. The longer a pool goes without being redeemed against the greater the discount on said pool.

## Redemption Example

Let's assume in this example that 100 reUSD are required to restore the peg and the redemption fee is 1%.

1. Redeemer acquires 100 reUSD from the market and triggers a redemption.
2. Borrowers have $99 worth of collateral removed.
3. The redeemer receives $99 worth of collateral.
4. The borrower's debt has been reduced by 99.8 reUSD. Effectively reducing it by an extra 0.8 reUSD.
5. The resupply protocol receives a fee of 0.2 reUSD.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.resupply.finance/resupply-protocol/stability-mechanics.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.