DCM Stabiliser Contract

DCM is trading below its Par Value

The DCM stabiliser contract is aimed at stabilising DCM when the market value of DCM goes below the DCM Par Value. The stabiliser decreases the DCM supply on the market.

The first step is to verify the need to stabilise and therefore activate this contract. The verification process starts when the TWAP of the DCM / USDC Pool (5 blocks / 1 minute) indicates a DCM Market Value of -1% or more below the DCM Par Value.

  • The threshold value is DCM Par value – 1%

Verification

  • The DCM Stabiliser Contract has not been executed in the last 8 blocks

  • Verify arbitrage opportunities to negate manipulation

  • Execute ARB Contracts when profitable

  • The threshold value is Par Value – 1% is/remains true

When all of the above conditions are met the DCM supply needs to be contracted.

Contraction Size

  • Determine target contraction size based on the liquidity of the DCM / DUCA Pool and DCM / USDC Pool, to rebalance the spot price in one swap on the DCM Par Value for both pools, whilst taking into account slippage

  • The maximum swap size is 1% of the DCM balance in the DCM / DUCA Pool

Execute Contraction

  • Send the required DCM into the core from the DCM / DUCA Pool

    • Seigniorage – slippage is deducted and added to the Treasury Fund

    • Valued against TWAP DCM Market Value (5 blocks / 1 minute)

  • DUCA received 1:1 with DCM Par Value

  • DUCA added to DCM / DUCA Pool

  • Activate USDC ARB Contract 2 to rebalance

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