For example, say  1KMD = 1.00USD at the time you did a paxdeposit,  you deposit your KMD and receive KMDUSD.  Say the next day, KMD takes a huge hit and halves in price, now 1KMD =0.50USD.  If you were to do a paxredeem,  you would receive 2KMD back.   It is a bit more complicated than this, but its the general idea of how pax works