Treasury & Peg Monitoring

Peg stability is a system-level responsibility.

Our stablecoin, thUSD, maintains its value through a multi-layered treasury architecture that combines real collateral, automated monitoring, and measured intervention.

There are no soft promises, no magic algorithms, and no reliance on reflexive collateral like most stablecoins. Peg defense is handled through asset-backed logic and 24/7 monitoring of liquidity conditions: both on-chain and in real-world markets.

Peg Anchoring vs. Peg Defense

It’s important to distinguish between the peg’s design and its defense mechanics.

• Anchoring: thUSD is backed 1:1 by real-world assets: not by tokens, governance promises, or fractional reserve models. This ensures that the intrinsic value of each thUSD is always rooted in actual, redeemable collateral.

• Defense: Market prices can still deviate from $1 during volatility or thin liquidity. Defense systems step in here to ensure short-term dislocations don’t become permanent breakdowns.

Treasury Structure Overview

Tharwa’s treasury includes:

• TharwaPool: Core pool holding capital inflows and yield

• Vault Allocations: Deployed RWA exposure generating real-world yield

• Liquid Reserves: Real-world stablecoin buffers for peg response

• Unallocated Capital: Temporarily idle funds waiting for deployment or redemption

The Confluence Engine determines how much capital should remain liquid vs. how much is deployed into yield-generating strategies.

Peg Defense System

During periods of sustained sell pressure or deviation from $1, peg defense is activated via:

1. Whitelisted Arbitrage

Designated market makers are allowed to:

• Buy thUSD below $1

• Redeem it 1:1 via vault-side or OTC redemption

• Capture risk-free arbitrage profit while helping restore the peg

This is enforced via smart contract thresholds and monitored 24/7.

2. OTC Liquidity Routing (Coming Soon)

Instead of relying solely on AMM liquidity, the OTC module enables:

• High-volume buys/sells without slippage

• Direct matching of sellers and institutional buyers

• Secondary liquidity via thUSD–vault swaps

This reduces volatility, improves depth, and offloads pressure from DEXs.

3. Reserve Release

If sell pressure exceeds arbitrage capacity, Tharwa can release stablecoins from liquid reserves to market makers — giving them capital to support the peg.

This does not require asset liquidation unless redemptions exceed all buffers.

Monitoring Infrastructure

The system tracks:

• On-chain thUSD price (DEXs, aggregators)

• thUSD supply fluctuations and redemption queues

• Arbitrage spreads and liquidity depth

• Real-world NAV of vaults and reserve buffers

• Custodian and oracle feed latency or anomalies

If thresholds are breached, alerts are triggered to the Treasury Safe for manual or automated response.