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- When MDO trades below the $1 target price
When MDO price is below the target price of $1, token holders can purchase Midas Dollar Bonds (MDB) by burning MDO to reduce the circulating supply with a 1:1 ratio, and Bonds will be burnt when users redeem MDO with a premium bonus.
In case of redemption, an amount of MDO will be minted according to the TWAP at the beginning of the epoch (for example, if the MDO price is $1.1 then one Bond burnt will get back 1.1 MDO). Important to note is that Bonds have no expiry after purchase.
- When MDO trades above the $1 target price
When MDO price is above the 1$ peg, the token supply will have to expand to push it back down to 1$ and the contract will allow the redemption of the MDB.
When the price of MDO continues trading above the $1 target price after bond redemption, the contract mints an appropriate amount of new MDO. This will be distributed to the Boardroom Stakers.
This three token system creates incentives through seigniorage, always pushing MDO towards its peg. MDS is used to redistribute the seigniorage from inflating the asset, while MDB is used to establish a price floor while MDO is in its deflationary state.
- Epoch Expansion
Capped at +50% of current expansion cap if there are bonds to be redeemed and follows the expansion cap if treasury is sufficiently full to meet bond redemption (See table below for detailed information)
Total MDO Supply Expansion / Bonds Issued per Epoch
- Under 500k 4.00% Cap
- 500k+ 3.50% Cap
- 1m+ 3.00% Cap
- 2m+ 2.50% Cap
- 5m+ 2.00% Cap
- 10m+ 1.50% Cap
- 20m+ 1.25% Cap
- 50m+ 1.00% Cap
- 100m+ 0.75% Cap
- 200m+ 0.50% Cap
- 1B+ 0.25% Cap
Bootstrap period: 1st week (21 epochs) goes with full expansion 4% each epoch
- (Boardroom) Epoch duration: 8 hours during expansion and 6 hours during contraction — the protocol reacts faster to stabilize MDO price to peg as compared to other protocols with longer epoch durations
- Epoch Expansion: Capped at 6% if there are bonds to be redeemed, 4% if treasury is sufficiently full to meet bond redemption
- MDB tokens do not expire and this greatly reduces the risk for bond buyers
- Price feed oracle for TWAP is based on the average of 2 liquidity pool pairs (i.e. MDO/BUSD and MDO/BNB) which makes it more difficult to manipulate
- The protocol keeps 75% of the expanded MDO supply for MDS boardroom stakers for each epoch expansion, 25% toward Midas DAO Fund. During debt phase, 50% of minted MDO will be sent to the treasury for MDS holders to participate in bond redemption.
- No discount for bond purchase, but premium bonus for bond redemptions if users were to wait for MDO to increase even more than the 1 $BUSD peg
This is a fund established to support MDO ecosystem:
- Rewards to all contributors & participants
- Marketing, events and partnerships to grow MDO.