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      • Mechanics of ZeUSD
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  1. Products
  2. ZeUSD - An Omni-chain, and Composable Stable Token

Minting Reward and Withdrawal Fees

When minting rewards and withdrawal fees are high:

  • Issuers are incentivized to mint ZeUSD

  • Issuers are disincentivized to redeem ZeUSD

  • This increases the ZeUSD supply

  • The increased supply tends to put downward pressure on the ZeUSD price

When withdrawal fees, minting rewards are low:

  • Users are incentivized to redeem/withdraw

  • Users are disincentivized to mint ZeUSD

  • This decreases the ZeUSD supply

  • The decreased supply tends to put upward pressure on the ZeUSD price

At the current stage, protocol implements a simplified state machine for both minting rewards and redemption fees, characterized by the following parameters:

Minting Rewards States:

  1. Fixed Stability Rate: A predetermined positive rate offered to incentivize minting

  2. Zero Rate: No minting incentives provided

Redemption Fee States:

  1. Positive Fee: A non-zero fee applied to redemptions

  2. Zero Fee: No cost barrier for redemptions

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Last updated 4 months ago

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