Par Value

The minimum reference value for DCM within the Protocol

What is Par Value?

DCM has a value which is determined by the secondary market. To ensure the stability of the Protocol DCM has a reference value called the DCM Par Value (“Par Value”). This reference value is used together with the market value to instruct the incentive structure.

The Par Value represents the 100% collateralisation of the DUCA Supply and a tipping point in market value for DCM. It is the most important reference to determine if sufficient funds or value is present in the structure in relation to the total value of DUCA in circulation.

How does Par Value work?

The Par Value is automatically set and represents the 1:1 ratio between the total DUCA Supply versus the available DCM in the Reserve. The Par Value can never become lower than its latest established value.

PAR VALUE

$\mathrm{DCM\ Par\ Value} = \frac{\mathrm{DUCA\ Supply}}{\mathrm{DCM\ Reserve}}$

The Par Value is a key stability mechanism in the Protocol. The Protocol always values DCM at its Market Value unless the DCM Market Value is below the DCM Par Value. Then the DUCA Protocol will value DCM against its Par Value.

DCM EXCHANGE VALUE

$\mathrm{DCM\ Market\ Value} > \mathrm{DCM\ Par\ Value} ; \quad \mathrm{DCM\ Exchange\ Value} = \mathrm{DCM\ Market\ Value}$

$\mathrm{DCM\ Market\ Value} < \mathrm{DCM\ Par\ Value} ; \quad \mathrm{DCM\ Exchange\ Value} = \mathrm{DCM\ Par\ Value}$

PAR VALUE CALIBRATION

The design of the Par Value is such that as the DUCA Supply grows over time, the Par Value is less able to align with the DCM Market Value and will be more subject to its own gravity. To mitigate this the Par Value will be calibrated to the Moving Average 200 (“MA200”) of the DCM Market Value when the Par Value has a value below this level. This is to ensure the two values are connected and to manage the bandwidth between the two values.

The number of DCM required in the DCM Reserve will be calculated and any additional DCM will be taken from the Reserve and added to the DUCA Treasury.

$\mathrm{Total\ DCM\ required\ in\ the\ DCM\ Reserve} = \frac{\mathrm{Total\ DUCA\ Supply}}{\mathrm{DCM\ MA200}}$

$\mathrm{Total\ DCM\ from\ the\ Reserve\ to\ the\ DUCA\ Treasury} = \mathrm{DCM\ present} - \mathrm{DCM\ required}$

• No calibration will take place in the event that the MA200 has a value that is lower than the actual Par Value.

On/Off Switch: When the DCM Market Value goes below the 23,6% retracement level the Par Value Calibration will turn off to avoid unwanted upward price influence upon the Par Value due to the longevity of the MA200. When the DCM Market Value moves above the 23,6% retracement level the Par Value Calibration turns on again.