uAD Token (Dollar)

This section focuses on mechanics specific to the uAD product. All UBQ rewards quoted in this section are the rewards before the supply penalty, as explained in the UBQ Token Documentation.

UBQ Token

Price stability

Price stability pertains to mechanisms that aim to stabilize the token price, short of performing a full price reset. Those mechanics (in each group, e.g., below and above 1.00 USD) are active all at once unless explicitly specified otherwise.

Below 1.00 USD

<aside> 💡 BURN NOT ACTIVE AT LAUNCH

</aside>

Incentives for traders. As the token price drops below 1 USD, traders on the 3CRV pool will be incentivized to buy the tokens and disincentivized to sell the token. Incentivization is achieved by burning a percentage of all uAD sold and issuing governance tokens (UBQ) in equal proportions for all uAD bought. Those incentives grow larger the further the price of the token falls below 1.00 USD. We define the function (in terms of percentages) as:

$$ (1-Price) *100 $$

So essentially:

• A price of 0.90 USD would mean that 10% of the seller's uAD are burned before trading them in the swap contract, and a buyer would get 10% of his uAD buy value as bonus UBQ.
• A price of 0.50 USD would mean 50% burned and 50% of the value as bonus UBQ.

Coupon/Auto-redeem minting. As the price falls below 1.00 USD, the system will begin issuing debt in the form of:

• uDEBTs (debt coupons)

  Participants may burn uAD tokens in exchange for uDEBT coupons issued at a premium rate. The premium is calculated as follows:

  $$ \frac{1}{(1-R)^2} - 1 $$

  where R stands for the debt ratio: (total supply of uDEBTs) / (total supply of uAD).

• Auto Redeem tokens

• Read about uDEBT token in the "Token list" page

Token List (V1)

The exact mechanics of each of those are specified in the links above.

Above 1.00 USD