> For the complete documentation index, see [llms.txt](https://docs.gypsytoken.org/tokenomics/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.gypsytoken.org/tokenomics/tokens/gpsy/price-stability-mechanisms.md). # Price Stability Mechanisms A price stability mechanism is a system or set of rules that are designed to keep prices reflective of the real estate portfolio value. Price stability is an important aspect of real-world asset-backed tokens to be used in Defi. The ability to maintain a stable price makes a token safe to use in Defi protocols as collateral without the risk of unjust liquidation. The gypsy protocol is designed with these price stability mechanisms to keep the token’s on-chain price representative of the value of the real estate portfolio. ### Gypsy purchasing rules When the Gypsy price is above the backing price, this will cause new Gypsy to be minted and purchased. This will cause the price of GPSY to fall toward the backing price. When the Gypsy price is below the backing price, this will cause the newly purchased Gypsy to come from a decentralized exchange. This will cause the price of GPSY to rise toward the backing price. Learn more about how GPSY is minted [here](/tokenomics/tokens/gpsy/minting.md) ### One token to back all homes The use of one token to back all of the homes causes the trading volume to be concentrated in a singular asset. Higher volume will result in better price discovery and help GPSY maintain the backing price. ### Daily Rental Income Gypsy distributes its rental income linearly over the month to all LGPSY holders. In the case that investors are withdrawing their GPSY from LGPSY in order to sell, it will increase the APY of the protocol for those users who are still staked. This APY increase should incentivize investors to buy and stake GPSY. ### Arbitragers In the Gypsy Protocol, Arbitragers are market participants that help GPSY maintain its Backing Price: they sell GPSY when the market price is above the Backing Price, and buy GPSY when the market price is below the Backing Price. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## 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, and the optional `goal` query parameter: ``` GET https://docs.gypsytoken.org/tokenomics/tokens/gpsy/price-stability-mechanisms.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. 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.