Element Zero does not use a currency peg or collateral or any supply or demand method to ensure stability. Element Zero’s stability protocol it is based on a smart contract algorithm that is designed to eliminate any possibility for volatility in the first place by preventing the user from selling the stablecoin above or below the current (fixed) face value.
The entirely new stability methodology, the Element Zero Stability Protocol, is designed to process a two way transaction. On one side the sender can send a stablecoin to a receiver but on the other side the receiver must send back in return cryptocurrency, an invoice or receipt with same value as the stablecoin. In the event that the value of the exchange does not match, the smart contract steps in to balance the face value between the sender and the receiver by returning the extra value to whom it belongs. The two-way nature of the smart contract means that the Element Zero stablecoin cannot be traded speculatively, since it’s value is enforced.