Minting
Minting EGGS:
Mechanism: Users can mint EGGS by depositing S into the protocol's smart contract.
Fee: A 2.5% fee is applied to each minting transaction. Fees are added to the protocol, increasing the S backing per EGGS.
Supply Cap: Minting stops once 100,000,000,000 EGGS have been minted. After this, new EGGS tokens can no longer be minted and the supply becomes truly deflationary via existing burning mechanisms.
Redeeming EGGS:
The simplest way to redeem your EGGS for S is to 'sell' back to the contract via the 'swap' tab in the dApp. This incurs the same 2.5% fee as minting, but burns the EGGS and sends the underlying S to the user. Fees are distributed to the contract, LP incentives and team at the same rates as minting.
Alternatively, EGGS can be redeemed by taking a loan against your position and instantly defaulting. This returns the underlying S to the user, minus the collateral premium and interest, and burns the EGGS.
Minting Example:
Let's say there is 100 EGGS tokens in existence, and there is 100 S tokens backing them on the contract. That means the price of 1 EGGS is 1 S. There is a 2.5% minting fee, so to mint the next EGGS token a user must pay 1.025 S. Of the fee collected, 70% or 0.0175 S, is added to the backing, so there is now 101 EGGS and 101.0175 S. We can calculate the new price of EGGS by doing 101.0175 S / 101 EGGS = 1.0001732673 S/EGGS. The price of every EGGS token has increased! The other 30% of the fee collected, or 0.0075 S, is distributed to LP incentives and the team.
[User Deposits 1.025 S]
|
v
+---------------------------+
| EGGS Token Smart Contract |
+---------------------------+
|
|---> Adds to Contract Backing:
| - 1.00 S (Base Amount)
| - 0.0175 S (70% of Fee)
|
|---> Distributes Fees:
| - 0.00375 S (15% of fee) to LP Incentives
| - 0.00375 S (15% of fee) to Team
|
|---> Mints 1 EGGS Token
v
[User Receives 1 EGGS Token]Last updated