Welcome to Xero Set Dollar
Xero Set Dollar (XERO) is an elastic supply decentralized stable coin. The goal of Xero Set Dollar is to reach price of almost 1 USD. As demand for XERO grows, price increases above 1 USD peg, which causes new XERO to be minted. This increases the supply of XERO, returning the price of XERO to the peg. There are several ways newly minted XERO are distributed. In the event of supply extension, 60% of the newly minted XERO will return to XERO holders that have bonded their XERO inside the DAO, while the remaining 40% return to Uniswap Liquidity Providers/Oracle. Lastly, XERO features a built-in debt market that handles supply contraction phases (XERO price < $1). Once debt has been created, XERO token holders can burn their XERO to acquire Coupons. Coupons will be redeemable for newly minted XERO during a supply expansion event. When burning XERO for Coupons, there is always a discount applied depending on the debt ratio.
Important to note is that the supply of XERO changes through voluntary actions of users. Your wallet balance will never increase or decrease without your volition.
Token Mechanics
What is an epoch?
In the XERO ecosystem an epoch is the time period in which the total supply of XERO is being adjusted. 1 epoch equals 6 hours, 4x daily. Within the epoch, the token price will be measured in order to decide if a supply extension or supply contraction is necessary. It also allows governance proposals to be raised and voted on by token participants.
What are Coupons?
When the total token supply contracts, the DAO incentives users to voluntarily burn their XERO for Coupons at a discounted XERO rate depending on the debt ratio. In the event of supply extension, Coupon holders will be able to redeem their Coupons for XERO. Coupons expire after 360 epochs=90 days.
What is bonding?
Bonding enables you to participate in supply extension and allows voting on proposals concerning XERO’s DAO. Users can stage XERO into the DAO, which can then be bonded. Also, they can bond their Uniswap LP tokens and earn rewards by providing liquidity,
This prevents manipulations and flash loan attacks during supply expansion and contraction events. Token holders with bonded XERO can vote on DAO governance proposals.
What do “frozen” and “fluid” states mean?
Frozen means you are available to transact. Fluid means you are committed to only bonded or unbonded XERO tokens until the end of this epoch. Once you have deposited some funds into the DAO you have entered the available state. In the frozen state:
- You can withdraw XERO from the DAO or stage more XERO
- You can bond your XERO
By bonding your XERO you enter the fluid state. In the fluid state:
-You can bond or unbond your XERO.
-You cannot withdraw or stage XERO.
When your XERO is bonded but you wish to withdraw, you first have to unbond your XERO. You can’t withdraw in the fluid state. At the beginning of the next epoch, you will return to the available state, which lets you withdraw your XERO.
You can deposit and bond in the same epoch. Once you have bonded your XERO, you enter the fluid state and can no longer withdraw or deposit until the next epoch starts.
Frozen and fluid states appear on the wallet page and the Liquidity Pool Reward page of the DAO.
How do I advance an epoch?
Epochs advance every 6 hours. They are advanced manually by a user. This allows the DAO to apply state transformations like Coupon expiry and supply regulation on advancement. To incentivize this behavior, the DAO mints reward XERO tokens to the sender upon successful advancement. As a new user, it is unnecessary to concern yourself with this technical detail.
What does the governance page do and how should I engage with it?
XERO is governed by token holders. The governance page is used for token holders to propose changes and to vote on proposals. You need to own at least 1% of bonded DAO to make a new proposal.
Why do some epochs grant rewards and some do not?
Rewards can only be granted during token supply expansion events. If a supply contraction event occurs or no event takes place, then no rewards can be granted. Supply expansion events occur when the price of XERO rises above 1 USD, which causes the minting of enough new tokens to return the price back to the peg, as well as clearing all remaining debt. The newly minted XERO are used to redeem all Coupons held by users. Once the Coupons are redeemed and the debt is cleared, bonded token holders and Liquidity Providers will be rewarded with the newly minted XERO.
How do we know if any given epoch will have rewards and how much rewards?
The DAO determines the token price of XERO through Uniswap’s time-weighted average price (TWAP) algorithm. TWAP is measured and weighed over the course of 1 epoch, 6 hours. This means, if the price changes drastically in the final minute of the epoch, it won’t have an outsized impact on the TWAP since for the majority of the 6hours the price remained steady.
You can estimate the chances of a supply extension event and the amount of rewards possible by doing the appropriate calculations. We encourage savvy, enthusiastic XERO community members to automate this process and share the information with the community.
Lockup time: 3 days
Epoch time: 6 hours
Website: www.xerosetdollar.io
Telegram: https://t.me/XeroSetDollar
