Safe Bond
  • When SDO trades below the $1 target price
When SDO price is below the target price of $1, token holders can purchase Safe Dollar Bonds (SDB) by burning SDO to reduce the circulating supply with a 1:1 ratio, and Bonds will be burnt when users redeem SDO with a premium bonus.
In case of redemption, an amount of SDO will be minted according to the TWAP at the beginning of the epoch (for example, if the SDO price is $1.1 then one Bond burnt will get back 1.1 SDO). Important to note is that Bonds have no expiry after purchase.
  • When SDO trades above the $1 target price
When SDO price is above the 1$ peg, the token supply will have to expand to push it back down to 1$ and the contract will allow the redemption of the SDB.
When the price of SDO continues trading above the $1 target price after bond redemption, the contract mints an appropriate amount of new SDO. This will be distributed to the Safe Center Stakers.
  • SDO Expansion: During expansion phase
    • Starting Max Expansion Rate is 2.5%
    • First target is 1M total supply for SDO
    • For each and every 25% increase in Total Supply of SDO after first target, the max expansion rate will be reduced by 5%.
      • Total supply increase to 1.25M SDO, expansion rate will be 2.375
      • at 1.56M total supply, expansion rate is 2.25625%
      • an so on,
      • 86M total supply, expansion rate is 0.8%
    • Expansion rate is 0 during the contraction phase.
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