Clean Float
A managed float model that turns clean through automation and transparency
What is Clean Float?
Clean Float is the way the Protocol influences the capital flow for DCM to influence the DCM Market Value through supply and demand in a fully automated and transparent model that is credibly neutral.
Through Clean Float the Protocol ensures that there is sufficient capital available in the ecosystem to maintain the presence of a liquid exit market for DUCA under all market circumstances. This is a prerequisite for the stability of the ecosystem.
How does Clean Float work?
The basic principle is that as the market value of DCM drops we need an increase in demand through the Protocol that gets DCM off the market. As the market value of DCM increases we need additional supply on the market. Both actions will dampen the volatility of the market value.
What is a 'dirty float'?
A dirty float is a floating exchange rate where a country's central bank occasionally intervenes to change the direction or the pace of change of a country's currency value. In most instances, the central bank in a dirty float system acts as a buffer against an external economic shock before its effects become disruptive to the domestic economy. A dirty float is also known as a "managed float."
FIBONACCI RETRACEMENT LEVELS
We make use of the following Fibonacci Retracement Levels as reference values to identify and qualify market dynamics.
Par Value | 0% 23,6% 38,2% 50% 61,8% 76,4% 100% DCM All Time High | 138,2%
The levels are dynamic and not a fixed value. They are determined by the Par Value and the DCM All-Time High (ATH). The Par Value is our critical baseline and reference value we do not want to go below so this reference value will always be representing the '0' in our Fibonacci Retracement Levels. On the other side of the spectrum we have the DCM All-Time High, this is the maximum level at any given point in time and represents the 138,2% level. The other values are calculated by making use of these two values.
CIRCULATING DCM SUPPLY
Clean Float directs capital inflow and outflow based on DCM Market Values and the net circulating supply of DCM. As the DCM Market Value changes, the target pool size of the Stability Pool is affected, which results in an increase or decrease in LPD supply by making use of the Stability Fee.
The table below shows that the % of DCM on the open market is being reduced by increasing the target pool size of the Stability Pool.
DCM Market Value
Target DCM reduction
Par Value -2%
98%
Par Value
96%
23,6%
76,4%
38,2%
61,8%
50%
50%
61,8%
38,2%
76,4%
23,6%
100%
0%
All Time High (138,3%)
0%
Last updated