The redemption floor
Strata maintains a USDC Redemption Pool (the Strata Redemption Mechanism, or SRM) that creates an autonomous floor at approximately $0.997 — one minus the 0.3% minimum redemption fee. This is mechanistically similar to how Liquity’s redemption creates a floor near $0.995, with one deliberate difference: the redemption pool has a finite, explicitly-sized capacity rather than drawing on all collateral.How the arbitrage loop works
1
srUSD trades below peg
Suppose srUSD trades at $0.996 on a secondary market.
2
Arbitrageurs buy the discount
Anyone can buy srUSD below $1 and redeem it through the pool for USDC at the
floor price, capturing the spread.
3
Buying pressure restores the peg
That redemption demand removes srUSD from circulation and pushes the market
price back toward $1 — permissionlessly, without anyone deciding to
intervene.
The floor is autonomous and permissionless: it is enforced by the contract,
available to anyone, and does not depend on a treasury choosing to act.
Collateral ratios
srUSD is over-collateralized, with ratios scaled to each asset’s liquidity and duration:
Less-liquid or longer-duration collateral carries a higher ratio to absorb
valuation uncertainty.
Residual risk
The redemption pool is finite by design. Under extreme, sustained redemption pressure that exhausts pool capacity, the autonomous floor weakens and the peg leans more on collateral liquidation and treasury depth. Pool capacity, fees, and collateral parameters are governed by the Risk Committee and are part of the protocol’s active risk management.Governance & the Risk Committee
Who sets collateral eligibility, ratios, and redemption-pool parameters.