The Nuon flatcoin's protocol algorithm is designed in such a way that the market value of Nuon increases over time in line with inflation. This guarantees a return equivalent to the Truflation Consumer Price Index (CPI). This is possible because Nuon is pegged to truflation as the source of inflation, and as long as Nuon maintains this peg, the price will continue to increase, effectively minimizing risk to the buyer.

The underlying risk for a Nuon holder who buys it from the market is minimized because Nuon is pegged to truflation, and its price will increase accordingly. This is supported by the unique Quadruple Redundancy Peg Stability Mechanism that guarantees the peg to inflation in four different ways.

The Quadruple Redundancy Peg Stability Mechanism is a unique feature of the Nuon protocol that ensures the peg to inflation is locked in four different ways:

1. The Nuon protocol algorithmically incentivizes users to mint or burn Nuon depending on market conditions, managing supply, demand, and the price of Nuon.

2. Overcollateralization protects the protocol and the peg. Each Nuon is always backed by collateral, with the protocol managing last-resort collateral liquidations.

3. An automatic Liquidity Pool feature protects the price of Nuon by preventing bad actors from draining the liquidity in the protocol ecosystem.

4. Arbitrage opportunities when the market price of Nuon diverges from the peg price accelerates the re-pegging process.

For more details, please watch this [video](https://www.youtube.com/watch?v=P3JNMZS65h8).

The increase in value for Nuon comes from the overcollateralization when it is minted by the collateral providers. They are compensated for the Nuon price increase from inflation through rewards of the governance and fee token nuMINT and fees from the protocol treasury.