Silver Peg

Overview

XSD is pegged to 1/1000th of a troy ounce of silver (XAG). Its target price in USD is not fixed — it moves with the silver market. A user minting XSD today at a silver price of $25/oz receives XSD worth $0.025 per token. If silver rises to $30/oz, each XSD is worth $0.030.

This is a critical distinction from USD-pegged stablecoins. XSD is not a dollar stablecoin.

Key Concepts

• XAG — The ticker symbol for silver in commodity markets, used by Chainlink's XAG/USD price feed.
• Troy ounce — A unit of mass equal to 31.1034768 grams, the standard for precious metals pricing.
• XSD target price — xag_usd_price / 1000, expressed in USD with 1e6 precision.
• Gram price — The per-gram silver price, derived as (xag_usd_price * 1e4) / 311035. This constant (311035) encodes troy oz in milligrams (31.1035 × 10,000) to preserve integer arithmetic precision.
• PRICE_PRECISION — 1e6 (6 decimal places). All price values in the protocol use this unit.

How the Peg Price Is Calculated

The XSDStablecoin contract queries the ChainlinkXAGUSDPriceConsumer for the raw silver price in USD, then normalises it to 1e6 precision:

function xag_usd_price() public view returns (uint256) {
    return (uint256(xag_usd_pricer.getLatestPrice()) * PRICE_PRECISION)
           / (uint256(10) ** xag_usd_pricer_decimals);
}

The XSD target price (used for collateral calculations throughout the system) is then:

xsd_target_price = xag_usd_price() / 1000

The PID Controller computes the silver gram price — used in interest accrual and collateral ratio math — as:

uint256 silver_price = (XSD.xag_usd_price() * 1e4) / 311035;
// 311035 = 31.1035 (grams per troy oz) × 10000, preserving integer precision

Why Silver, Not Dollars?

From the protocol's design rationale:

1. Commodity anchor. Silver has intrinsic value independent of any government or central bank. Pegging to silver rather than USD insulates XSD from dollar inflation over the long term.
2. Scarcity and store of value. Like gold, silver has a constrained global supply, making it a more defensible long-run unit of account than fiat.
3. 1/1000 denomination. Dividing by 1000 produces a more practical token price in the current silver market (approximately $0.02–$0.04 per XSD at typical silver prices of $20–$40/oz), suitable for everyday transactions.

Chainlink Oracle

The consumer validates oracle freshness by checking answeredInRound >= roundID before returning the price. If the oracle is stale, the call reverts.

Security Considerations

• USD price float. Because XSD's USD value follows silver prices, integrators must not hardcode XSD as worth $1. Always read XSD.xag_usd_price() for the current target price.

Never treat XSD as equivalent to $1 USD in any integration. Its value is xag_usd_price() / 1000 and will fluctuate with the silver market.