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description: Ethereum base concept
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# How it works?

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### Key Components of Zunami:

**USD and ETH Omni Pools:** created for USD-pegged and ETH-pegged stablecoins, these pools dynamically allocate funds across various profit-generating strategies through DAO-based voting. The yielded profits from these strategies are distributed among ZUN token stakers. Furthermore, Omni pools serve as collateral for issuing zunStables.

**APS (Algorithmic Peg Stabilizer):** APS's main role is stabilizing stablecoin pegs via balanced Curve pool management, minting and redeeming zunStables. For instance, in zunUSD/FRAXBP, APS withdraws USDC, mints zunUSD, and adds it back, boosting APR for ZUN stakers with higher omni-pool collateral. Users can stake zunStables into APS, contributing to peg stabilization efforts. In return, they receive fund rebalancing services, auto-compound, and additional ZUN emission if zunStables are locked in.

**ZUN Staking:** a contract that allows users to stake ZUN for 4 months and receive vlZUN. ZUN stakers receive all operational profits from the protocol and play a pivotal role in making key decisions, including omni pool allocation and distribution of ZUN emissions. To receive additional ZUN emissions, stakers must approve consent to recapitalization.

**ZUN Distributor:** a contract responsible for distributing ZUN emissions based on bi-weekly Gauge weight votes.

**The green arrows** depict that all income from APS (15% performance fee) and all income from the omni pools (100% revenue from collateral) is distributed among ZUN stakers. The protocol's high income generates substantial APY in staking, attracts buyer interest, creates buying pressure, and consequently leads to ZUN price growth.

**The blue arrows** illustrate the distribution of new ZUN for incentivization purposes:&#x20;

* a portion of ZUN emission is allocated for Bribes on Votium and Vote Market. By utilizing the Curve flywheel, for every spent dollar in ZUN tokens, around 1.2-1.3 dollars in CRV are obtained as emission in zunStables pools.&#x20;
* APS is also incentivized using ZUN, with additional ZUN emission granted to users who lock zunStables.&#x20;
* ZUN emission is also awarded to ZUN stakers who stake their tokens and agreed to recapitalization.

The entire ZUN distribution serves to incentivize protocol's beneficial needs that positively impact ZUN stakers' income, system stability, and reduction of circulating ZUN tokens.

Thus, ZUN rewards go solely to those truly benefiting the ecosystem: ZUN stakers ready for recapitalization, APS LPs with locked deposits, and veCRV & vlCVX voters backing Zunami pools. The high ZUN staking APR, boosted by 100% profit from collateral, spurs buying interest, crafting a self-reliant economy where ZUN emission propels profit growth and the profit, in turn, pushes ZUN's price upward.
