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.
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: