Stability Mechanisms

USDAI’s $1 compute peg is maintained through three interlocking stability mechanisms, ensuring reliability even under volatile conditions.

1. Dynamic Pricing Oracles

• Role: These oracles provide real-time feeds from GPU.NET’s marketplace, tracking the cost of GPU compute across providers. They incorporate factors like GPU performance, energy costs, and regional availability.

• Implementation: Oracles are decentralized, pulling data from multiple sources (e.g., Dapp.gpu.net, external compute markets) and aggregating it via a median-based consensus to prevent manipulation.

• Impact: If compute costs rise to $1.10/hour, oracles signal smart contracts to adjust USDAI’s backing, maintaining the peg by recalibrating the collateral ratio.

2. Algorithmic Supply Adjustments

• Role: Smart contracts automatically mint or burn USDAI to balance supply with demand, preventing deviations from the peg.

• Process:

  • If USDAI trades above $1 (e.g., $1.05), excess demand triggers minting to increase supply, pushing the price down.

  • If USDAI falls below $1 (e.g., $0.95), excess supply triggers burning to reduce circulation, lifting the price back to $1.

• Example: During an AI boom, demand for USDAI surges. The system mints 10,000 additional USDAI, backed by newly contributed computecredits, stabilizing the market.

3. Proof-of-Compute (PoC)

• Role: Validators on Grid.gpu.net use PoC to confirm compute availability, ensuring USDAI is never over-issued or under-collateralized.

• Mechanism: Providers submit cryptographic proofs of their GPU capacity (e.g., benchmark results, uptime logs), which validators verify before credits are tokenized. This prevents fraudulent collateral claims.

• Impact: PoC ties USDAI’s supply to real, usable compute power, reinforcing trust in its backing and preventing systemic risks.