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Staking and Stability Mechanism

Governance Token Staking#

Holders of governance tokens can choose to stake their governance tokens in the staking pool of the stability mechanism. As a result, these governance token holders may claim a share of the platform profits in proportion to their share of the staking pool. Each second the platform profit is allocated to the holders of staked governance tokens.

Example#

  1. We start with the following assumptions:
    • Let the current outstanding amount of YOU governance tokens be 50,000 at the beginning of the observed period.
    • Let the amount of YOU tokens which are staked in the stability mechanism be 12,500 (25%).
    • Let the current average platform income per second be uUSD 5.56E-04.
    • Let the observation period be 4 hours.
    • Let the amount of YOU tokens in a user's wallet be 2,500, i.e. 5% of the outstanding amount. All of which are staked in the stability mechanism.
  2. During the course of these four hours (14,400 seconds), the total platform income on the platform will be roughly uUSD 8. This income is available for stakers of YOU tokens in the stability mechanism.
  3. Per staked YOU token the income is uUSD 4.44E-08 per second.
  4. Over the four hour period this is uUSD 6.40E-04 per YOU token. Over the course of a year this would be roughly uUSD 1.40.
  5. On the 2,500 staked YOU tokens over the four hours the income is roughly uUSD 1.60. Over the course of a year this would be roughly uUSD 3,494.

Stability Mechanism Activation#

This feature is not yet implemented. It will likely look similar to the following: In case one or several vaults become under-collateralized, such that a step in is no longer profitable, governance tokens from the staking pool of the stability mechanism will be used to collateralise these vaults. This is done either by selling them in the market or using them directly as collateral. This will be done until all the vaults in question have adequate collateral or until the stability mechanism runs out of governance tokens.