And why are you sharing this with us? Let's see if you manage to keep your 8% profit in one year 

I know what arbitrage between exchanges is and it is not what I was asking about. I actually listed it in the list of assumptions I was making (there exists arbitrage between exchanges causing them to all have the same price for sUSD) specifically because I was worried the conversation might derail in that direction.

Synthetix claims that there is an economic incentive for people to buy up undervalued sUSD on exchanges but I fail to see what this incentive is. This is what my question is about. If you know the specific mechanisms/incentives in place, please do share.

I was reading the Synthetix litepaper (https://www.synthetix.io/uploads/synthetix_litepaper.pdf) where it is claimed that there is a pegging mechanism to maintain 1 sUSD = USD but I couldn't quite grasp how it is supposed to work.

In the litepaper, there's only one vague bullet point about the pegging mechanism for sUSD. The bullet point claims that arbitrage will maintain the peg from falling below 1$. I guess I just don't see where there is an actual arbitrage opportunity.

I'm working with the following assumptions:

- The only way to repay a X sUSD debt on Synthetix is by sending it X sUSD
- There is perfect arbitrage across exchanges so that the price on any exchange reflects the global market price

Let's say you mint 10 sUSD using Synthetix and on an external exchange 1 sUSD = 0.5 USD. You could buy 10 sUSD for 5$ on that exchange, use it to repay your debt. You are now debt free and have 10 sUSD (but you are down 5$). However you need to sell the sUSD to cash out your profit and unfortunately, the best price right now is 1 sUSD = 0.5 USD. So when you sell your 10 sUSD, you only get 5$.

In total, you spent 5$ and earned 5$, for a total of 0$ profit. Which means, there wasn't really an arbitrage opportunity.

I believe MakerDAO uses a similar reasoning in their "pegging mechanism".

Am I missing something?

Thanks so much!!! I can't reply to your PMs because I'm limited to 1 Private Message / hour and 1 post / 10 minutes. Looks like the code had expired when I tried it, we need to coordinate a bit :/ I will try again in the following 5 mins, it would be really nice if you can PM the code as soon as you get it, I'll be refreshing my PMs

I sent the donation here: https://blockstream.info/tx/5bd22fb2015ab7848a0f7651fbf80cd69d5acd67648fe8b85cfc9a3b2ec715a1

That worked... Mind sharing the code? 

Yeah I did, none of them work 

Google is asking me a USA based phone to receive a SMS verification (which I don't have). If anyone is kind enough to receive the SMS for me, I'll send 5$ in BTC. Please PM me phone number and BTC address.