# Stack PSM + AMO and Insurance Fund ## Stack PSM + AMO The Stack PSM "Peg Stability Module" and AMO “Algorithmic Market Operations Controller” are contracts that implement various functionality and monetary policies intended to maintain more `$MORE` price stability. The PSM introduces the ability to mint and redeem `$MORE` for `$USDC`. This AMO is allowed to conduct open market operations in an algorithmic manner to support `$MORE` price stability. ### PSM Mechanism: #### **When `$MORE` price is ABOVE $1.00** Users can use the PSM to mint `$MORE` for free 1:1 with `$USDC`. Redemptions are not enabled when price is above $1.00 to encourage users to swap to sell `$MORE` to lower the price. #### **When `$MORE` price is BELOW $0.997** Users can use the PSM to redeem `$MORE` for `$USDC` 1:1 for a 0.3%. Minting is not enabled when price is below $1.00, users should be encouraged to swap to buy `$MORE` to raise the price. ### AMO 100% of `$USDC` in the PSM should be deployed into an AMO on Pearl, specifically the MORE-USDC stable-swap pool. The goal of the AMO is to keep the `$MORE` price at perfect peg and interest rates optimal. Profits from the AMO operations will remain with the AMO, increasing its size over time. The AMO LP positions are staked in the gauge, farmed rewards are sent to the Pearl Team multisig once per day. #### **When `$MORE` price is ABOVE $1.01** The AMO will mint and sell `$MORE` for `$USDC` directly into the LP pool when the price is above 1.01. This `$USDC` is kept as profit for the AMO to be used in future operations. #### **When `$MORE` price is BELOW $0.999** When the price is beneath $0.999, the AMO will remove liquidity, take `$USDC` from the liquidity pairing and use it to buy `$MORE` to reestablish peg. Remaining `$USDC` is paired with `$MORE` and liquidity is resupplied and staked. Any remaining `$MORE` held by the AMO is then burned. ## Insurance Fund As noted in [liquidations](/using-stack/liquidations.md), 50% of the liquidation fee is kept by the protocol and distributed to the insurance fund. The insurance fund is a 4/5 multisig operated by the team. It's role is to serve as a rainy day fund that can bail out the protocol in the event of a liquidity crisis. During a significant `$MORE` depegging, these assets will be used to buy and burn *after* the move. This would be a highly profitable trade for the insurance fund, while also getting greater `$MORE` protection per dollar invested in the insurance fund. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.stackmore.xyz/tokenomics/stack-psm-+-amo-and-insurance-fund.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.