Price Stability and Action Phases

$1.00... For now

Our primary target is to maintain the price of NUSD at $1.00, aligning with the standards of existing stablecoins. This is, however, subject to change over time in response to inflation or a weakening dollar.

To accommodate these changes and to ensure stability, we've established a set of action phases that regulate taxes, rebates, rewards, and available activities depending on the current price of NUSD. Here are the phases:

Expansion Phase ($1.10+):

During this phase, seigniorage rewards are distributed to stakers to bring the price back to peg. Rewards are paid in seigniorage, to stakers of the Conclave. 20% of the seigniorage goes to the Stability Pool. Buy/Sell/Tx fees during this phase are added to collateral. Refer to the Taxes and Rebates section for more details.

Above-Peg ($1.05-$1.0999):

No seigniorage rewards are paid in this phase. Instead, Buy/Sell/Tx fees are rewarded to stakers. For more information, please check the Taxes and Rebates section.

Over-Peg Safe ($1.00-$1.0499):

In this phase, there are no seigniorage rewards. Buy/Sell/Tx fees are rewarded to stakers and used to buy back and burn NSH. Refer to the Taxes and Rebates section for more details.

Under-Peg Safe ($0.95-$0.9999):

Just like the Over-Peg Safe phase, there are no seigniorage rewards in this phase. Buy/Sell/Tx fees are rewarded to stakers and are used to buy back and burn NSH. More details can be found in the Taxes and Rebates section.

Below-Peg ($0.90-$0.9499):

This phase also does not offer seigniorage rewards. The Buy/Sell/Tx fees are used to buy back and burn NSH. For additional details, please see the Taxes and Rebates section.

Recovery ($0.8999-):

During the recovery phase, bonds are issued at a discount to be redeemed back at $1.03 (refer to the Bonds section for more details). Buy/Sell/Tx fees are used to buy back and burn NUSD. Conclave stakers can use rewards to purchase bonds directly at a deeper discount without a lock penalty. A 10% non-penalized tax is taken from bonding, which is swapped in the Stability Pool for NSH and rewarded to Conclave stakers. Once NUSD returns to $1.03, the swapped NUSD is used to buy back and burn NSH.

Each phase is designed to maintain the stability of NUSD and ensure that the system remains robust and responsive to market conditions.