Arbitrage
How third-party self-interest keeps the two tokens honest.
The protocol does not need to defend a peg, because it does not have one. What it has is a redeemable floor and a fee on every action taken to exploit it.
Two trades
| Condition | Trade | Protocol outcome |
|---|---|---|
| vPILE below claim value | Buy and redeem | Redemption fee captured, supply reduced |
| vPILE above claim value | Wrap PILE and sell vPILE | Wrap fee captured |
Neither trade requires the protocol to act. Both require a fee to be paid to it.