It can use either a centralized exchange or algorithmic mechanism to hold the peg. So this design pushes all the risk onto another layer. Understanding these risks is key to understanding the long-term stability of a system like this.

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calle (@callebtc) on X

Here is how it works on @CashuBTC. To stabilize the BTC in its reserves, a mint has several options to choose from. It can either use an exchange ...