The present proposal introduces the BOOTusd mechanics and in particular how its collateralization and minting work. We describe two options for a bonding programs and their respective incentives that would effectively contribute to bootstrap a token sink effect for BOOT token via minting BOOTusd. The BOOT holder community will get to vote on their preferred option for the bonding program.

Key take-aways

About BOOTusd mechanics

BOOTusd is a partially collateralized stablecoin, where the collateralization ratio for minting is variable. For those familiar with FRAX, the concept is similar except for a few key differences.

Minting BOOTusd through ICHI requires:

The Collateral Reserve and the Community Treasury are two parts of the BOOTusd collateral.

Redeeming BOOTusd for USDC requires a 0.45% redemption fee that goes to the BOOTusd Collateral Reserve (it stays in the ecosystem).

BOOTusd starts off with a 100% collateralization ratio, meaning that 1 USDC is required to mint 1 BOOTusd. Starting off in this state:

  1. Allows those without BOOT tokens to mint BOOTusd. It gives a way for people to get into the BOOT ecosystem without the BOOT token initially
  2. Initial maximum safety for BOOTusd as it can be fully redeemed with USDC in anticipation of building treasury leading to minting ratio changes