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A comment on Another stablecoin loses peg – DEI team working to restore the peg. Parent comment

Re:Another stablecoin loses peg – DEI team working to restor... by sp332 on Tuesday May 17, 2022 @08:11AM (#31409314)
Yes, normally buying DEI would help drive demand and thus price back upward. The article mentions that arbitrage bots do this all the time and it helps maintain the peg. It's only a problem when it's too difficult to mint new DEI (putting collateral into the system).
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Re:Another stablecoin loses peg – DEI team working to restor... by pas on Tuesday May 17, 2022 @11:18AM (#31412005)
could you explain this in a bit more detail? why it's difficult to mint new DEI, or why it's difficult to put collateral into the system?

is the incentive that "currently it trades below 1.0, so I buy it, then redeem it for 1.0" which should drive the price up, right?

where does the money come from to finance this arbitrage? is there a redemption pool that shrinks every time someone executes this cycle?

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