🎯 How Will XUSD Maintain Peg Control?
Description: Ensuring Stability After Reaching Peg
Successfully reaching the peg is a significant milestone for the XUSD ecosystem. It marks not just the culmination of our efforts, but also the beginning of a new phase where maintaining stability is key. While the process of achieving and sustaining the peg will be challenging, the rewards will be well worth it. So, what steps do we take after achieving peg stability?
⚖️ Healthy Peg Maintenance
Unlike many other tokens that rely on collateral to maintain their peg, XUSD employs a unique approach called Volatilate. This means that when the token's value rises above its peg, holders of the VibePass will receive a share of newly-minted tokens.
- Key Benefit: VibePass holders not only benefit from their initial investments, but they can also earn additional rewards over time, enhancing their overall returns.
This system incentivizes both growth and long-term stability for the token, ensuring that the peg remains strong as more participants engage with the ecosystem.
💡 Seigniorage: Driving Stability
Seigniorage refers to the profit made from issuing new tokens, defined as the difference between the cost of minting and the market value of the token. The balance between growth and stability hinges on controlling the rate of expansion (how many tokens are minted).
- Over-minting: Too many tokens can destabilize the peg, leading to inflation and volatility.
- Under-minting: Not enough tokens may restrict growth, limiting the ecosystem’s potential.
At present, we are continuously refining our model to determine the ideal rate of expansion. Though there is no definitive formula yet, our focus in the coming months will be on perfecting this balance to maintain long-term stability.
📅 Our Operational Process
- At the end of each epoch (approximately every 6 to 12 hours), if the XUSD valuation remains above peg, new tokens will be minted.
- These newly minted tokens will be distributed to VibePass holders.
- Holders can:
- Claim their tokens immediately, or
- Store them for future use within the VibePass system.
Given the anticipated growth of our economic ecosystem, it is unlikely that there will be immediate pressure to sell these tokens. Instead, users can take advantage of future financial products, including a lending market (potentially through the Impermax Platform) and other innovative products we are developing.
This approach allows us to both reward our loyal community and maintain peg stability, all while supporting the long-term vision of a vibrant and expanding ecosystem.
🛠️ Key Takeaways:
- Volatilate rewards long-term holders while helping maintain peg stability.
- Seigniorage is carefully controlled to avoid inflation or deflation.
- Our economic model will evolve with a focus on maintaining growth while ensuring stability.