Inuko Finance Documentation

Backed vs Pegged

INUKO is backed and not pegged
INUKO is backed, not pegged.
Each INUKO is backed by stable coins assets in the treasury, not pegged to it.
Because the treasury backs every INUKO, the protocol would buy back and burn INUKO when it trades below the backing price.
This has the effect of pushing INUKO price back up.
On the other hand, INUKO could always trade above the backing price because there is no upper limit imposed by the protocol.
Think of pegged as
Pegged=Backing pricePegged = Backing \medspace price
While backed means
Backed≥Backing priceBacked \geq Backing\medspace price