TiTi Protocol
Protocol Reserve Value & Protocol Added Value: strong reserve backing TiUSD mint, redeem, circulation and usage.
· Protocol Reserve Value(PRV):
TiTi Protocol will reserve almost all of the funds obtained from the TiUSD sale to ensure that the protocol can repurchase all TiUSD in circulation at $1; ·
Protocol Added Value (PAV):
This fund can be regarded as a tax for the protocol to adjust TiUSD's circulation, steming from user's transaction slippage. PAV will be allocated to: * Distributed to participants of Market Maker Fund * Rainy Day Fund · * Protocol governance Incentive
With Reorders, the protocol can ensure that the average issuance price of TiUSD in the market is always not less than $1, which means that the protocol always has enough funds to repurchase all TiUSD in circulation at $1. We define the funds as the Protocol Reserve Value ( herein after referred to as “PRV”). The protocol guarantees that PRV will only be used to repurchase TiUSD through smart contracts and there will be no illegal misappropriation. In this way, TiUSDholders have plentiful confidence because enough PRV guarantees that the protocol will always have sufficient funds to repurchase the TiUSD in their hands.
Back to the example, it is clear that the counterparty of all user transactions is the protocol itself. It cost Alice 10 USDC to get 9.99 TiUSD. The protocol sells 9.99 TiUSDs and gets 10 USDCs. Therefore, the protocol only needs to reserve 9.99 USDC for Alice and Alice has every reason to believe that the protocol can guarantee that Alice can sell TiUSD at $1 in exchange for USDC anytime. Therefore, PRV will ensure that TiUSD price will never appear to be in a irreversible situation of less than 1$ for a long time, which significantly enhances users' trust in the protocol.
In response, the above ReOrders mechanism can be set as follows. After Alice completes the trade, the protocol will only reserve the corresponding amount of USDC funds. The remaining USDC raised from the M-AMM can be defined the Protocol Added Value ( herein after referred to as “PAV”). Only 9.99 USDC are reserved, and the funds in the pool are 10009.99 TiUSD and 10009.99 USDC.
ReOrders mechanism is now as follows:
For the n round ReOrders, ΔPAVn is:
After the n round ReOrders, the amount of USDC in the M-AMM is Xn':
The amount of TiUSD adjusted by the Protocol in the M-AMM is ΔYn' as
● If ΔYn' < 0, it means that in this round of ReOrders, the Protocol needs to mint TiUSD, and the mining amount is ΔYn' ;
● If ΔYn' = 0, it means that in this round of ReOrders, the Protocol keeps the status;
● If ΔYn' > 0, it means that in this round of ReOrders, the Protocol needs to burn TiUSD, and the burning amount is ΔYn' ;
Obviously, the protocol can accumulate value in TiTi Protocol's market-making process. It can be defined as Protocol Added Value. The reason for this design is that any adjustment of market circulation will impact the circulating TiUSD. Although TiUSDs inflation and deflation always reflect the real supply-demand relationship in the market and the PAV ensures that inflation and deflation will not affect the inherent value of TiUSD in circulation, any sell and buy will cause TiUSD's price to deviate from the anchor price temporarily. To a certain extreme extent, it will cause unnecessary panic among TiUSD users. Therefore, we ensure that users who buy or sell TiUSD will compensate the holders of TiUSD in circulation through the slippage setting. Furthermore, slippage ensures that the protocol can resist giant whales because when the depth remains the same, the greater the transaction volume, the greater the transaction slippage. On the other hand, the emergence of a significant slippage is a good thing for other TiUSD holders. Because the PAV is enlarging, the transaction depth provided by the TiTi Protocol will be further deepened and subsequent users will have less transaction slippage if they choose to hold and wait.
Then cumulative added value PAV is:
Last modified 3mo ago
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