Liquidity and Minting Pool

The Liquidity and Minting Pool (LAMP) is the core mechanism that anchors USST’s $1 peg while providing immediate liquidity and incentives.

When users mint USST, they can allocate it directly into the LAMP. In return, they receive USST governance tokens. This incentivizes users to lock liquidity within the protocol rather than sell USST on the open market, helping reduce volatility.

The LAMP functions as a primary liquidity pool for USST. Approved ecosystem participants (e.g., DEXs, lending protocols, SPVs) can purchase USST from the LAMP at a fixed price, ensuring deep, consistent liquidity.

To maintain peg stability, USST rewards are adjusted dynamically based on market conditions. If USST trades below $1, the protocol increases rewards to attract buyers and reduce selling pressure. Conversely, reduced rewards temper excess supply during periods of strong dcollemand.

The LAMP also supports redemption and redistribution of liquidity. Liquidity providers earn pro-rata rewards when USST is bought from the pool. This structure supports sustainable circulation while ensuring price discipline.