$UP is a redeemable pegged token on Unifi Protocol. This means UP is simply a representation of FEES generated by the trading activities that occur on Unifi. For UP to be generated, it should be backed by the fees generated by base token. This base token is the redeemable value that you get if you redeem your UP.
Example: trxUP has a base of TRX. If the current redeemable price of UP is 10 TRX, then for a new UP to come in to existence, at least 10 TRX need to be generated as fees. A new UP will then be created and hence UP is backed by these fees.
So why does UP keep going UP? Because it is backed by fees, and if less fees are generated, less UP is generated as well. Hence the number of base tokens backing a UP token, can never go down.
Does this mean dollar value of UP can never go down? NO! UP is subject to both the price of its base token (example the price of TRX backing the UP) as well as its own market price. So while UP’s redeemable base token number (example: amount TRX backing an UP) can only go up, its market value in dollar terms can fluctuate.