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

• BOOTusd can be minted with a part of BOOT tokens once the Community Treasury increases in value, which decreases the collateralization ratio
• It is in the interest of the BOOT community to create a token sink for BOOT
• BOOT.Finance will sell BOOT bonds to bootstrap the Community Treasury and decrease the collateralization ratio
• Two options are proposed for the bonding program, including their incentives
• BOOT holders as well as NFT holders will vote on Discord for their preferred option

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:

• USDC that goes to Collateral Reserve
• BOOT that goes to Community Treasury

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