# PENGU Operations ## PENGU Buyback and Resale Mechanism PENGU Strategy uses automated smart contracts to continually buy PENGU tokens using treasury funds derived from PST fees, then resell those PENGU tokens with a markup, and send all profits to PST buyback and burn. *** ### 1. Threshold-Based Lot Formation * PST trading fees accumulate in the treasury's trading pool. * When the balance exceeds **1 ETH**, the contract automatically uses a fixed "use amount" to buy PENGU from the Abstract DEX. * Purchased PENGU forms a *lot* (a tracked batch meant for resale). *** ### 2. Markup and Sale Logic * Each PENGU lot is listed for sale at a **1.1x markup**, but only in the **PENGU/ETH pair**. * A lot can't be sold until the DEX price for the lot is at least `purchase price × 1.1` — ensuring protocol profit, not loss. *** ### 3. CEX Price Verification * Before approving any sale, the contract checks the current CEX (centralized exchange) price in USD. * The real DEX sale only proceeds if the PENGU/ETH DEX price does NOT deviate by more than 10% from the CEX USD price (after conversion). * This prevents manipulation of DEX price for quick artificially-triggered sales and ensures genuine market demand. *** ### 4. Proceeds and Buyback * **100% of the ETH received from PENGU sales is automatically used for PST buyback.** * All bought-back PST is burned (irreversibly destroyed). * This creates continuous upward pressure on PST price and minimizes supply. *** ### 5. Summary Flow * Fees collected from PST trades * Treasury accumulates to 1 ETH threshold * PENGU bought and formed into new lot * Lot listed for resale at 1.1x purchase price, only if DEX ≈ CEX price * On sale, 100% proceeds used to buy and burn PST *** ## Price Manipulation Protection * Markup-only sales: no resales at a loss or break-even * Twin price reference (DEX + CEX): no isolated DEX pump/dump triggers * All operations enforced on-chain and by verified oracles *** --- # Agent Instructions: 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: ``` GET https://pengu-strategy.gitbook.io/pengu-strategy/pengu-operations.md?ask= ``` The question should be specific, self-contained, and written in natural language. 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.