PegKeeper Monitor

Overview

This indicator tracks the total debt and collateral that is held in each PegKeeper contract. Total debt across all PegKeeper contracts has a direct connection to the borrow rates for crvUSD. With the borrow rate equation as follows:

With:

- r: rate

- rate0: rate when pegkeepers have no debt and the price of crvUSD is 1

- price_peg: desired crvUSD price: 1.00

- price_crvusd: actual crvUSD price

- DebtFraction: ratio of the PegKeeper's debt to the total outstanding debt

- TargetFraction: target fraction

- PegKeeperDebt: sum of debt of all PegKeepers

- TotalDebt: total crvUSD debt

This means that increased debt in the contracts leads to lower borrowing rates while the opposite is true when the debt decreases. As the debt fraction plays a larger role in borrow rates than slight depegs to crvUSD, this indicator can help a user understand trends in the dynamics between each PegKeeper pool and borrow rates.

In addition to monitoring borrowing rates for crvUSD, this indicator monitors the balance of debt and collateral in each of the PegKeeper contracts. While small variations between collateral and debt are to be expected as the pool automatically corrects itself as market conditions change, large imbalances between the two could indicate larger issues with the peg of crvUSD.

How can I use it?

The above chart is an example of the PegKeeper Monitor indicator for the crvUDS/USDT pool. A user planning to use collateral to mint crvUSD can look at these charts to help them determine if they believe the current borrow rates will be on the higher or lower end of the spectrum.

For example, if a user decided to mint crvUSD, when the debt is at its current level (seen on the far right of the chart) they can expect that once the debt falls back to near zero, the borrow rates will likely increase. In this situation, a user might prefer to either increase the number of bands they distribute their collateral across when creating their position or create a position that has an initial higher collateral ratio since they expect that the rates will likely increase in the future.