🥅TIFO Treasury Pool
Last updated
Last updated
The following video can help you quickly understand how Tifo Trade works:
Unlike the traditional DEX and CEX, TIFO does not use the mechanism of AMM and order book, but uses the TIFO treasury pool for market making. The treasury pool consists of a basket of blue chip cryptocurrencies, with mainstream crypto assets such as BTC/ETH/USDT and stablecoins in the pool to meet the needs of users' trading.
The proportion of risk assets (assets with volatile prices) and stablecoin assets in the treasury is 50/50, fluctuating around 5% up and down.
The treasury pool operates on the Olympus (3,3) model with a number of enhancements. In the early to mid-term of the agreement launch, the focus is to attract enough funds to inject into the vault pool, the larger the pool, the more able to support greater trading volume, the agreement will attract all kinds of assets to mint $TIFO through the sale of bonds, including risk assets such as BTC, ETH and stablecoin assets such as USDT, USDC, and $TIFO-USDT LP assets, because there will be some arbitrage space through the bond minting $TIFO, so users are happy to use these assets to mint $TIFO in the vault, at this point, the vault pool is getting bigger and bigger.
Treasury Contract serves as a secure vault for all funds collected by the Protocol. When a user purchases bonds, the treasury receives the full value of the LP in exchange for an equivalent value of $TIFO. The newly minted $TIFO tokens are backed by the treasury's risk-free assets (RFV), which are explained in detail in the bond contract.
The total amount of assets entering the treasury through bond sales, including $USDT, $USDC, $WBTC, $ETH, $UNI, TIFO-USDT LP, and other assets, is known as the total treasury assets.
The total treasury risk-free assets represent the total risk-free value of various assets entering the treasury through bond sales. The USDT bond's value is equal to its no-risk value, while the LP bond's total value is greater than its no-risk value.
Consequently, the total treasury assets may decrease with the decline in the price of $TIFO, but the total treasury risk-free assets show a unilateral upward trend.
To ensure stability and security, Tifo Trade backs each newly minted $TIFO token with a treasury-risk-free asset. As the risk-free assets in the treasury increase, more $TIFO tokens will be minted.
To ensure the operation of the rebased currency, we have set a sufficiently secure threshold for the funds in the treasury. Only when the total risk-free value of the treasury exceeds this threshold, will we use the excess assets as counterpart funds for the contract.
Users shorting or longing an asset will change the amount of different tokens in the pool, so the protocol provides for different tokens to mint $TIFO at different prices, thus balancing the proportion of each token in the pool.
Assuming the protocol sets a 20% weighting of ETH in the pool.
When the total value of ETH tokens in the pool falls below the target weight of 20% set by the protocol, it means that the vault pool needs to be replenished with ETH, and the protocol automatically reduces the price of ETH minting $TIFO (with a higher discount relative to the $TIFO trading price), and the greater arbitrage scope of ETH minting $TIFO attracts users to use ETH to mint $TIFO, in order to drive the weight of ETH in the vault pool to gradually converge to the 20% set by the protocol.
When the total value of ETH tokens in the pool is higher than the target weight of 20% set by the protocol, it means that the vault pool does not need to be replenished with ETH for the time being, and the protocol automatically increases the price of ETH minting $TIFO (with low or no discount or even negative discount relative to the $TIFO trading price), the scope for ETH minting $TIFO arbitrage becomes smaller or even disappears, users lose interest in ETH minting $TIFO for the time being, and ETH is automatically prevented from entering the vault pool.
