New rebase mechanics

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% 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.

1 Like

This has my vote. I think SHARE and USD holders benefit from this design. What’s not to like?

This is a good attempt. Although it is the low period of the project, it also indicates more opportunities. We can boldly try any plan that may change the situation. The mechanism of Robert v2 is a very advanced mechanism. The V2 mechanism may be a very good solution when a large number of institutions enter after the project gradually matures in the future. However, few people in the current market seem to be able to understand it. We need one that is easier for people to understand. Mechanism to get through this downturn.

all you need to understand is hodl SHARE to get rebase, bond USD to not get debased. all the rest is extra for the nerds.

unless you’re making the argument that this is too much/hard to code this is basic AF

2 Likes

As of today, the USD Debase will be applied equally across all pools and USD holders. This is bad for USD holders as it gives them nowhere to hide during negative rebases.

I propose a bond system so that people can be incentivized to buy USD below par and then put it into a contract where it will remain until positive rebases occur.

When positive rebases occur, 20% of the new USD supply should go to Bonded USD holders to unlock their bonds. After bond holders have been 100% paid, all new USD goes to SHARE holders.

There is no time limit for USD held in the bond. The only way that it can be unlocked is through positive rebases.

This will create enough incentive for USD holders to take their off the market and not face the debase.

3 Likes

discussion continued here, because it has been brought to my attention that less is more.