Redemption at par
Regulation & issuerThe right to exchange a token for one unit of the underlying with the issuer, and the conditions attached: eligibility, minimum size, fees and settlement time.
Par redemption is the arbitrage channel that enforces the peg. If approved participants can always redeem $1.00 of token for $1.00 of cash, any market discount becomes a profit opportunity and closes.
The practical detail is who qualifies. Many issuers only redeem for onboarded institutional clients above a minimum size; retail holders must exit through secondary markets and take the market price.
Fees, banking hours and settlement lag all widen the band within which the price can wander before arbitrage becomes worthwhile.
Why it matters
Whether redemption is open is the fastest way to tell a liquidity wobble from a solvency event.
See it in action
Related terms
A sustained, material break from the reference value — not a momentary wick. Usually defined as trading beyond a threshold (commonly 0.5%) for a meaningful period.
How far the market price sits from the token's reference value, in percent. USD.NET computes it as (price − peg target) ÷ peg target.
The size you can trade before moving the price. On USD.NET this is indexed on-chain DEX pool depth containing the asset; centralised order books are not included.