# Stablecoin Mutuum’s stablecoin is designed to provide liquidity without necessitating a dedicated asset pool. When borrowers lock eligible collateral in excess of the stablecoin’s face value, the protocol mints new tokens on demand. This overcollateralization approach ensures that each minted unit is backed by more than its nominal amount, helping prevent sudden de-pegging events. The stablecoin’s protocol-defined price remains pegged to the U.S. dollar, offering borrowers a reliable way to tap into the value of their holdings without liquidating potentially appreciating assets. Unlike conventional borrowed assets that rely on user-supplied liquidity, Mutuum’s stablecoin charges interest directly to its borrowers, and that interest flows into the protocol’s revenue mechanisms, reinforcing overall system resilience. Should the stablecoin’s market price deviate from its peg, arbitrage opportunities encourage users to either mint and sell or buy and repay, guiding the price back toward equilibrium. As an overcollateralized token minted in a decentralized lending environment, Mutuum’s stablecoin enables dynamic liquidity for participants while retaining core protections against sudden market shifts. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.mutuum.com/introduction/concepts/stablecoin.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.