DUCA Stabiliser Contract 1

DUCA is trading below its Exchange Value

The DUCA stabiliser contract 1 is aimed at stabilising DUCA when the market value of DUCA goes below the DUCA Exchange Value. The stabiliser reduces the DUCA 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 Pool 5 (5 blocks / 1 minute) indicates a DUCA Market Value of 0,3% or more below the DUCA Exchange Value.

  • The threshold value is Exchange Value – 0,3%

Verification

  • None of the Stabiliser Contracts have been executed in the last 8 blocks

  • Verify arbitrage opportunities to negate manipulation

  • Execute ARB Contracts when profitable

  • Threshold value Exchange Value – 0,3% is/remains true as determined by the TWAP price feed of Pool 5 (5 blocks / 1 minute)

When the above conditions are met, the DUCA supply needs to be reduced.

Contraction Size

  • Determine the target DUCA balance in the DUCA / USDC Pool to rebalance the spot price in one swap

    • DUCA target spot price = DUCA Exchange Value

  • Calculate the amount of DUCA that needs to be taken out of the DCM / DUCA Pool

    • Taking into account slippage

    • There is no maximum swap size

Execute Contraction

  • The AMO sends DUCA to the Core from DCM / DUCA Pool

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

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

  • DCM received 1:1 to DUCA EV

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

  • The AMO adds DCM to DCM / DUCA Pool

  • Activate USDC ARB Contract 1 to rebalance the pools

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