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: