Peg preservation
jFIATs are traded on a primary market and on multiple secondary markets. The fact that jFIATs can be redeemed for their collateral in USD, at their face value, provides them a strong peg on both markets.
Peg on the primary market
jFIATs keep their peg since they can only be bought with USD and sold for USD at the oracle price, and without price impact, using Synthereum's liquidity pools burn and mint mechanism. Users can interact with Synthereum's contract, use Jarvis Exchange or Paraswap (only on Polygon).
Peg on secondary markets
jFIATs can be listed on various exchanges, with their price fluctuating because of the trading activity. But since jFIATs can be bought and sold at the oracle price and without price impact on their primary market, arbitrageurs can easily correct any misprice on secondary markets, thus maintaining the peg.
For example, if the price of jEUR on Uniswap is higher than the price of jEUR on Jarvis Exchange, a trader could buy jEUR with USD on Jarvis, and sell the jEUR on Uniswap for an instant profit. This will push down the price on Uniswap, to make it closer to the real market price.
Eventually, it can also help other stablecoins with their peg, by pairing them with jFIATs.
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