Frequently Asked Questions

What is PegBreaker?

• PegBreaker is a decentralized finance (DeFi) protocol designed to disrupt the DAI stablecoin. It leverages market dynamics, community coordination, and a risk-free strategy to profit from DAI’s depeg. The platform allows users to short DAI through minting DPG, staking, and removing collateral when the price drops.

What is the main goal of PegBreaker?

• The main goal of PegBreaker is to depeg DAI, generate profits for the community, and offer a risk-free opportunity for users. By capitalizing on the market inefficiencies and fluctuations in DAI’s price, PegBreaker empowers users to benefit from these opportunities with zero risk involved.

How does PegBreaker work to depeg DAI?

• PegBreaker exploits market weaknesses and uses a coordinated strategy to short DAI. Users mint DPG tokens through MakerDAO’s collateralized DAI borrowing strategy. As DAI’s price drops, users can sell DPG tokens in liquidity pools, increasing sell pressure and driving DAI’s price further down, thereby depegging it.

What is the maximum profit if I use the PegBreaker strategy and DAI collapses?

• If DAI’s price collapses to $0.01, users can remove their collateral (e.g., $150 worth) without needing to repay the borrowed DAI. In this case, your profit would be $100, as you keep the collateral value, and the borrowed DAI becomes worthless. The key is to wait until DAI collapses before exiting the position to maximize profits.

How does PegBreaker ensure risk-free profits for users?

• The strategy is designed to be risk-free through the minting process using MakerDAO. By borrowing DAI and minting DPG, users are able to take advantage of market fluctuations without exposing themselves to traditional risks like liquidation or repayment.

How does the PegBreaker LP staking program work?

• Users can add liquidity to the DPG/USDC pair on platforms like Uniswap. These LP tokens are then staked within PegBreaker, allowing users to earn rewards. The rewards are distributed over epochs, incentivizing long-term liquidity commitment and market stability.

Can I participate in PegBreaker without being involved in the risk-free strategy?

• Yes! There are multiple ways to participate in the PegBreaker ecosystem. You can stake your LP tokens, earn rewards, and participate in community-driven activities without directly using the risk-free strategy for shorting DAI.

What are epochs in PegBreaker, and how do they work?

• Epochs are fixed periods in which users earn rewards from staking. Rewards accumulate during the epoch, and users can claim them after the epoch ends. Users must wait for a 10-day period after the epoch ends to claim their rewards, and they have a two-day window before the epoch ends to unstake without penalties.

How long do epochs last?

• Epochs last a set period, usually a week or a month, depending on the protocol’s configuration. The duration of the epoch is predefined, and users are encouraged to stake their tokens throughout the epoch to maximize rewards.

How can I claim my rewards in PegBreaker?

• Rewards are claimed 10 days after the end of the epoch. If users have chosen auto-compounding, their rewards will automatically be restaked unless they opt out. If they do not claim within a certain time, their rewards will be locked and restaked after 14 days.

What happens if I miss the unstaking window?

• If you request to unstake and miss the designated 2-day window before the epoch ends, you will incur a 3% penalty on your staked amount, including any rewards. If you request to unstake ahead of time, no penalty applies.

How does the bond issuance process work in PegBreaker?

• Bonds are issued when DPG is below $1. Users can purchase bonds by burning DPG tokens. The bonds offer returns of 25% for 1-year terms and 60% for 2-year terms. These bonds are tradable in secondary markets, offering liquidity options before the bond term ends.

How long do bonds last?

• Bonds can last indefinitely until the price of DPG reaches $1. Only when DPG hits $1 can bondholders redeem their bonds. If the price doesn’t reach $1, the bonds remain active, and users can hold them for as long as needed.

Can I trade bonds on secondary markets?

• Yes, bonds can be traded on secondary markets, allowing users to buy or sell bonds before the redemption term ends. This feature provides flexibility and liquidity for bondholders.

How does the governance work in PegBreaker?

• Governance is handled through DPB tokens, which will be used by holders to vote on proposals and changes to the protocol. Bondholders can participate in governance after their bond terms end. Voting power is based on the number of DPB tokens staked.

What is the minimum requirement to submit a proposal?

• A proposal can be submitted by anyone holding at least 1% of the DPB tokens. However, proposals will only be enacted if there is a minimum of 30% voter participation in the voting process.

Can I delegate my voting power?

• Yes, users will be able to delegate their voting power to others once the DAO system is in place. This feature will be available after the system is fully operational and will allow for more community involvement in governance.

How does the points system work in PegBreaker?

• The points system rewards users for engaging with the platform, such as posting, tweeting, and submitting proposals. While points cannot be used for voting, they will be used to reward active community members in the future.

What happens if DAI’s price collapses to $0?

• If DAI’s price collapses to $0, users will profit by removing their collateral without repaying the DAI borrowed. The total amount of profit depends on how much DAI was borrowed and how low the price of DAI goes. The maximum profit from this strategy is essentially the collateral value minus the borrowed DAI.

Will PegBreaker remain a risk-free strategy for long-term use?

• Yes, PegBreaker’s strategy is designed to be risk-free, as long as the strategy is followed correctly. The protocol works in a way that minimizes risks for users, while still allowing them to capitalize on market movements to earn profits in a sustainable and long-term way.