How it works

한국어로 읽기 KRW* targets a price of ₩1. batt issues it against crypto collateral worth more than the debt. Redemptions and other mechanisms give traders an incentive to bring the market price back toward that target.

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Minting and repayment

When you deposit collateral and borrow KRW*, batt records your collateral and debt in your position. Your collateral’s value in won must exceed your debt and meet that market’s collateral requirements. Repaying KRW* reduces your debt. batt burns the tokens used for repayment. Once you have paid the full debt, including accrued interest and applicable costs, you can recover the remaining collateral. See How to use KRW* for the borrowing and repayment steps.

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Below ₩1: redemptions

Through a redemption, a KRW* holder exchanges tokens for collateral from borrowers’ positions at the protocol’s reference value in won. This differs from repaying your own loan. Suppose KRW* trades at ₩0.98. An arbitrageur could make the following trade: If the collateral sells for its ₩1 million reference value and there are no fees, gas, or collateral sale costs, the profit would be ₩20,000. If actual costs exceed that amount, the trade loses money. These prices are illustrative. Buying KRW* for redemption creates demand. Burning the redeemed tokens reduces supply. Both changes encourage the market price to recover.

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Which positions are redeemed?

When a redemption is assigned to a collateral market, batt starts with that market’s lowest-rate positions. It reduces each affected borrower’s debt and removes the corresponding collateral. A position can be redeemed even when it has enough collateral. Managing your position explains how your rate affects the queue and how a redemption changes your balances.

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Above ₩1: new issuance

If KRW* trades above ₩1, borrowers can deposit collateral, mint KRW*, and sell it at a premium. They still owe the debt and interest and must manage their collateral. The extra income from selling above the target price needs to justify the costs and risks. The premium can persist if borrowers lack collateral, face limits on issuance, or cannot trade with enough liquidity.

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The peg is not guaranteed

Redemptions and minting do not guarantee an immediate return to ₩1. Price recovery also depends on the following conditions. Liquidation deals with debt in undercollateralized positions. It serves a different purpose from exchanging KRW* for collateral through redemption.