Key Functions of the Preon AMO

Peg Stability:

The AMO autonomously mints and burns STAR based on supply-demand imbalances. These actions are carefully designed to maintain the STAR peg. The closed-system approach ensures that every USDC in circulation corresponds proportionally to the total STAR minted, and any excess STAR is always burned during rebalancing to maintain full collateralization.

Liquidity Deployment:

The AMO manages the USDC-STAR LP by depositing USDC and STAR in balanced proportions. The minted STAR follows a programmatic schedule, and when STAR is sold back for USDC, the protocol burns the proportional amount of STAR during rebalancing to ensure nothing unbacked leaves the system.