To facilitate the adoption of rUSD as a trusted stablecoin outside of the ReSource trading network, reserved rUSD, MU, and other forms of equity capital are utilized to establish rUSD:cUSD liquidity pools. The following arbitrage mechanism then ensures the 1:1 peg of the trading pair.
In short, the Reserve utilizes its MU income to offer 1 cUSD worth of MU against one unit of rUSD at all times. This creates an arbitrage opportunity in case that the price of rUSD drops below 1 cUSD on the open market. Vice versa, in the event that the rUSD price rises above that of cUSD, network members are incentivised to deepen their debt positions and use the so created rUSD to purchase cUSD, driving the rUSD price down towards the pegging target.
The rUSD accumulated within the Reserve following this process can then be either directly sold to network members seeking to close their debt positions, or alternatively, to third parties in the form of Gift Cards which can then purchase goods and services from network members.
It should be noted that the overall rUSD supply is tightly correlated with the size and trading volume of the ReSource Network. The higher the demand for ReSource credit lines, the greater the amount of rUSD minted into existence. On the other hand, being a result of network fee payments, the amount of reserved MU is likewise tightly correlated with the same metrics. This, in conjunction with the fact that all circulating rUSD experience buy pressures exercised by rUSD debtors, fortifies the above mentioned pegging mechanism while limiting the publicly available supply of rUSD within margins carrierable by the ReSource trading network.