Another day, another mechanic. With Angle's launch of USDA et's talk about the Transmuter and how it works.

Another day, another mechanic. With Angle's launch of USDA et's talk about the Transmuter and how it works. 

https://docs.angle.money/transmuter/transmuter

The transmuter can be thought of as an evolution of Maker's Peg Stability Module. It allows users to mint USDA by providing whitelisted assets like USDC. Unlike's Maker's PSM, it will not always give you 1:1. Every asset has a desired exposure and a fee is applied if the exposure is exceeded.

In the event of a collateral asset depeg, these fees don't allow users to drain the transmuter of all the good assets, leaving only the bad. Additionally, each collateral asset has a price oracle that is used as a circuit breaker to disable mints in the case of a depeg.

In the case of a black swan event, USDA holder can instead call the redeem function, which will burn their USDA for a proportional amount of assets in the transmuter. A penalty factors is applied, which is intended to discourage bank runs. This is inspired by Gyroscope who deserves their own thread.