DPIP - 1 : Less complexity/More HODL(hands)

Rebase - happens every 12 hours

  • (Neutral) Nothing happens if USD is $0.95 - $1.05
  • (Postitive) If USD is above $1.05 SHARE holders receive newly minted USD
  • (Negative) If USD is below $0.95 then USD gets burned (unless its staked or bonded)
    • Debase - another term for (Negative) Rebase
      (exact amounts that will be burned/minted still need to be discussed)

70% 100% of the rebase while USD is above $1.05 goes towards SHARE holders
20% of the rebase while USD is above $1.05 goes towards staked USD/ETH LP holders
10% of the rebase while USD is above $1.05 goes towards staked SHARE/ETH LP holders

while below $0.95 USD gets debased unless bonded and must remain bonded until USD is back above 0.95

if there is any bonded USD then 50% of the rebase goes towards unlocking bonded USD in the order that it was bonded (FIFO)

Bonding

  • only USD can be bonded
  • bonded tokens are locked until protocol unlocks them
  • USD can only be bonded while price is under $0.95
  • User manually chooses when or if they want to bond
  • bonded USD does not get debased while under $0.95

Staking

* only LPs can stake
* LPs can stake/unstake at any time
* USD in staked ETH/USD LP does not get debased while under $0.95 (assuming we figure out how to code this without any bugs)
(optional) LPs takes 168 hours (7 days) to unstake

The purpose of Dollar Protocol is not only create an algorithmic stablecoin, but to remove much of the speculation from the stablecoin itself and instead redirect it towards a second token. Other projects with a single token model such as Ampleforth, or Empty Set Dollar attract unnecessary speculation and volatility around a coin that is supposed to be stable, creating massive bubbles and lengthening the time it takes for the price to return to the peg.

The logic behind the LP lock is to prevent people from removing liquidity immediately upon falling below peg, and to ensure that only those who have long term interest in the protocol are rewarded. As far as the time, 7 days might not be optimal, but I do strongly believe its a good idea to have some kind of lock on them if they’re going to be rewarded with a part of the USD expansion. At the same same, since LPs are safe from negative rebase(debase), that may be enough to prevent people from exploiting the protocol this way so I’ve posted it as optional.

I think this mechanism can be tried. It inspires people to provide liquidity for $share and more reasons to hold $share, and $usd also has an opportunity for the market to choose when it pays spirals, which makes the market game more interesting .

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I think there is issue with currently burned amount of usd and overgenerated amount of share. Need to burn 10x times the share to return to something normal as 5 MLN cap of shares.