Can Indigo prove that the price equilibrium of an iAsset is its peg?

Can you prove that iAsset prices have to converge to the peg price through rational market behavior?

I feel like I’m missing something crucial. Supply and demand might lead to an iAsset secondary market price different from the peg depending on the stability pool yields. Why do I think so? I understood that you can only close your CDP against your iAsset directly if you have the keys to a wallet that minted the same amount of iAsset, so if you bought it from secondary you can only fundamentally profit from providing stability and getting it liquidated. This also carries costs like having to wait for other CDPs to get liquidated, but is the only reason to arbitrage towards the peg if the secondary market reached a supply/demand sourced equilibrium different from the peg somehow. Also iAssets might have a premium on the secondary because through minting you risk paying 150% of the value in collateral for 100% of the value in iAsset. I seem to not understand how liquidations with stability pools are guaranteed to maintain the price peg. In my understanding the fundamental iAsset price is determined indirectly through a function of the peg and the liquidation behavior of the stability pool.

I would really appreciate a proof, because Indigo papers and articles do not contain one.

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You may get better responses if you rephrase your question

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What is wrong with the phrasing? I provided some examples as to why the price equilibrium of an iAsset should be different from the peg and only be related to the peg. If the price of an iAsset is bound to converge to its peg, then it should be possible to game theoretically prove it with correct assumptions and arguments. If my assumptions, which are based on your articles, papers and posts, or my economic logic are incomplete or wrong, I please would like to know where and why. A mathematical formulaic proof is not needed.

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I’m not sure if this is a good answer because Indigo would be my first time doing any of this and i’m still learning about all this. Therefore this is all theory for me. But maybe using Chainlink as an oracle service will help solve some of the concerns and the rest will be solved over time with more people onboarding reducing the risk (having more players on both sides). Also, I would say not having whales, (don’t know if this is possible) while still having market makers incentivize to close gap for arbitrage .

On the positive tip because of the decentralization trading won’t be halted. I would be interested to see what occurs on a secondary market when the main market trading is halted on the same “asset”.

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If the questions are broken down with assumptions removed then they could be more easily addressed. Otherwise I don’t know how to respond to what’s being said.

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I think he’s asking how to solve the so called Oracle problem.

If we’re talking commodities, to get an accurate peg to a real asset, the iAsset must derive it’s worth from some kind of oracle. How do you decide which one, and how do you know it can be trusted?

Something like that?

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Wouldn’t it be best to use Charlie3 (ticker “C3”) since it is a native oracle on the cardano blockchain?

IUSD lost its peg today according to Cardano tokens | Cardano Explorer -data that I have been watching. It has been trading around 0,95 Dollars for more than 6 hours. The only timeframe it came closer to the peg (to about 0,96 Dollars) was about 5 minutes long. I found a youtube-video in which the author claims that it lost its peg on the first day, too! The charts show that it started trading much to high in order for it to have had the peg on the first day. -So he must be right. Is this just a supply and demand issue or is the peg-mechanism not working right?

Or is an oracle-service used that isn’t capable of stabilising the peg?

iUSD did not lose its peg. Nothing to do with oracles. Just a supply and demand imbalance in a market with very little liquidity. Liquidity pools haven’t been deployed yet, so it’s to be expected that iAssets are volatile in price.

We had the same conversation on reddit and somebody who seemed to be very focused on the subject said that oracles are needed, too.
What is your comment on that?
And if that’s the case which oracle service are you using?