Liquidity and Minting Pool

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

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

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

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

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