Equations
Last updated
Last updated
Swaps between GG and sGG during staking and unstaking are always honored 1:1. The amount of GG deposited into the staking contract will always result in the same amount of sGG. And the amount of sGG withdrawn from the staking contract will always result in the same amount of GG.
The collateral pool deposits GG into the distributor. The distributor then deposits GG into the staking contract, creating an imbalance between GG and sGG. sGG is rebased to correct this imbalance between GG deposited and sGG outstanding. The rebase brings sGG outstanding back up to parity so that 1 sGG equals 1 staked GG.
GG has an intrinsic value of 1 BUSD, which is roughly equivalent to $1. In order to make a profit from minting, GGDAO charges a premium for each mint.
The premium is derived from the debt ratio of the system and a scaling variable called BCV. BCV allows us to control the rate at which mint prices increase.
The premium determines profit due to the protocol and in turn, stakers. This is because new GG is minted from the profit and subsequently distributed among all stakers.
The debt ratio is the total of all GG promised to minters divided by the total supply of GG. This allows us to measure the debt of the system.
Mint payout determines the number of GG sold to a minter. For reserve mints, the market value of the assets supplied by the minter is used to determine the mint payout. For example, if a user supplies 1000 BUSD and the mint price is 250 BUSD, the user will be entitled 4 GG.
For liquidity mints, the market value of the LP tokens supplied by the minter is used to determine the mint payout. For example, if a user supplies 0.001 GG-BUSD LP token which is valued at 1000 BUSD at the time of minting, and the mint price is 250 BUSD, the user will be entitled 4 GG.
GG is minted and distributed to the stakers.
GG is minted for the minter. This happens whenever someone purchases a bond.
GG is minted for the DAO. This happens whenever someone purchases a bond.
The DAO gets a proportional number of GG to the minter.
At the end of each epoch, the collateral pool mints GG at a set reward rate. These GG will be distributed to all the stakers in the protocol.
Whenever someone purchases a mint, a set number of GG is minted. These GG will not be released to the minter all at once - they are vested to the minter linearly over time. The mint payout uses a different formula for different types of mints. Check the minting section above to see how it is calculated.
Every GG in circulation is backed by the GGDAO collateral pool. The assets in the collateral pool can be divided into two categories: stablecoin and non-stablecoin.
The stablecoin balance in the collateral pool grows when mints are sold. RFV is calculated differently for different mint types.
For reserve mints such as BUSD mint, the RFV simply equals to the amount of the underlying asset supplied by the minter.
For LP Mints such as GG-BUSD mint, the RFV is calculated differently because the protocol needs to mark down its value. Why? The LP token pair consists of GG, and each GG in circulation will be backed by these LP tokens - there is a cyclical dependency. To safely guarantee all circulating GG are backed, the protocol marks down the value of these LP tokens, hence the name risk-free value (RFV).