> For the complete documentation index, see [llms.txt](https://docs.ethena.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ethena.fi/protocol-overview/peg-arbitrage-mechanism.md).
# Peg Arbitrage Mechanism
There is one presently available trade strategy available to users to profit from a price dislocation of *USDe* in external markets from what it is actually worth:
**Cross Market Arbitrage:** purchasing or selling USDe into the protocol mint & redeem contract when USDe price has diverged from $1.
## Trade Strategies
It's important to keep in mind:
* *USDe* is backed strictly by the protocol backing assets.
* *USDe* is able to be **minted** & **redeemed** on demand by authorized, whitelisted users. This means that at any time, approved users are able to ramp in & out.
* about 0.50% of backing assets are typically held in stablecoin form and available in the Minting Smart Contract to enable on-demand redemptions. This balance is systematically replenished from the 4% of the backing assets of *USDe* held in stablecoins that are readily available from multiple custodians.
* The value & amount of *USDe's* underlying backing is generally unaffected by any dislocations or rapid movements of price across any Centralized/Decentralized Spot Market, AMM Protocols, etc., though fluctuations in those markets may cause temporary dislocations in the secondary market price of *USDe* as the market's "reference assets" for the target peg.
* The value of the reserve underpinning *USDe* is generally unaffected by the removal of liquidity in volatile markets.
### 1. Cross Market Arbitrage
This strategy enables any user approved to mint/redeem to profit from the difference between the price/amount users' are able to **mint**/**redeem** *USDe* with Ethena & the value of *USDe* in an external market. An external market includes all centralized & decentralized spot markets such as "USDe/USDC" and AMM Protocols such as Uniswap or Curve. 
If *USDe* is worth **LESS** in an external market than from Ethena directly, a user could:
1. Buy 1x *USDe* at 0.95 from Curve using *USDT*.
2. Redeem 1x *USDe* at 1.00 from Ethena receiving *USDT*.
3. Profit.
If *USDe* is worth **MORE** in an external market than from Ethena Labs, a user could:
1. Mint *USDe* using *USDT* from Ethena.
2. Sell the *USDe* in the Curve pool for > 1.00 for *USDT*.
3. Profit.
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