Price stability
iTRY maintains it's price peg through arbitrage between the primary market and secondary markets.
The primary market allows eligible, whitelisted participants to mint and redeem iTRY at a fixed rate of 1:1 with Turkish Lira. When the price of iTRY in external markets deviates from this value, arbitrage opportunities appear. These opportunities create economic incentives for market participants to buy or sell iTRY in ways that naturally push the price back toward its peg.
Arbitrage
Arbitrage refers to a trade that profits from price differences for the same asset across different markets. When an asset is cheaper in one venue and more expensive in another, traders can buy the asset where it is undervalued and sell it where it is overvalued. As they do so, supply and demand shift in each market and the prices converge.
Because iTRY can be minted and redeemed on demand by eligible participants, its primary-market price serves as a hard reference point. Secondary-market prices may move temporarily due to liquidity, sentiment, or order flow, but arbitrage closes these gaps.
Examples
iTRY trades below 1 TRY on the secondary market
When iTRY is cheaper in secondary markets, arbitrageurs can buy it at a discount and redeem it on the primary market for its full 1 TRY value.
Example:
iTRY trades at 0.95 TRY on a DEX.
A whitelisted primary market participant buys iTRY on the DEX, driving the market price up.
The participant redeems iTRY on the primary market at 1.00 TRY.
The 0.05 TRY spread becomes the participant's profit.
As whitelisted arbitrageurs repeat this trade, demand for the underpriced iTRY increases, lifting its secondary-market price back toward the peg.
iTRY trades above 1 TRY on the secondary market
When iTRY is more expensive in secondary markets, arbitrageurs can mint new iTRY on the primary market at 1 TRY and sell it on the secondary market for more.
Example:
iTRY trades at 1.05 TRY on a DEX.
A whitelisted primary market participant mints new iTRY on the primary market at 1.00 TRY.
The participant sells the newly minted iTRY on the DEX at 1.05 TRY, driving the market price down.
The 0.05 TRY spread becomes the participant's profit.
As whitelisted arbitrageurs repeat this trade, the increased supply reduces the secondary-market price back toward the peg.
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