Stability system

BONDS

Stability system is the main defense line of PolyDogeDAO to prevent any destructive resistance. The point is to reward PDD buyers for helping the protocol to stabilize the price of PDD to it's peg to 1 WMATIC.

• 1 PDD > 1.01 WMAIC (expansion) When PDD price is above the 1 WMATIC peg, the token supply will have to expand to push it back down to 1 WMATIC. The expand will be distributed to the Boardroom Stakers.

• 1 PDD < 1.01 WMATIC (contraction) When TWAP PDD price is below the target price of 1 WMATIC, PDD token will be issued but emmision will drop with one tenth of current expansion rate during expansion. The expand will be distributed to the Boardroom Stakers.

DAO Fund will delete 3% of its PDD reserves each full epoch below peg

For further economics see Boardroom section.

This two token system creates incentives through seigniorage, always pushing PDD towards its peg. PDS is used to redistribute the seigniorage from inflating the asset, while peg is used to establish a price floor while PDD is in its deflationary state.