Equations
Last updated
Last updated
Swaps between SNAKE and sSNAKE during staking and unstaking are always honored 1:1. The amount of SNAKE deposited into the staking contract will always result in the same amount of sSNAKE. And the amount of sSNAKE withdrawn from the staking contract will always result in the same amount of SNAKE.
The treasury deposits SNAKE into the distributor. The distributor then deposits SNAKE into the staking contract, creating an imbalance between SNAKE and sSNAKE. sSNAKE is rebased to correct this imbalance between SNAKE deposited and sSNAKE outstanding. The rebase brings sSNAKE outstanding back up to parity so that 1 sSNAKE equals 1 staked SNAKE.
Minting happens by allowing users to purchase a bond. This bond price is the Mint price.
SNAKE has an intrinsic value of 1 DAI, which is roughly equivalent to $1. In order to make a profit from minting, Uroboros Finance charges a premium for each minting action.
The premium is derived from the debt ratio of the system and a scaling variable called BCV. BCV allows us to control the rate at which bond prices increase.
The premium determines profit due to the protocol and in turn, stakers. This is because new SNAKE is minted from the profit and subsequently distributed among all stakers.
The debt ratio is the total of all SNAKE promised to bonders divided by the total supply of SNAKE. This allows us to measure the debt of the system.
Bond payout determines the number of SNAKE sold to a minter. For reserve mints, the market value of the assets supplied by the minter is used to determine the bond payout. For example, if a user supplies 1000 DAI and the mint price is 250 DAI, the user will be entitled 4 SNAKE.
For liquidity mints, the market value of the LP tokens supplied by the minter is used to determine the bond payout. For example, if a user supplies 0.001 SNAKE-BNB LP token which is valued at 1000 DAI at the time of bonding, and the bond price is 250 DAI, the user will be entitled 4 SNAKE.
SNAKE supply does not have a hard cap. Its supply increases when:
SNAKE is minted and distributed to the stakers.
SNAKE is minted for the bonder. This happens whenever someone purchases a bond.
SNAKE is minted for the DAO. This happens whenever someone purchases a bond. The DAO gets the same number of SNAKE as the bonder.
At the end of each epoch, the treasury mints SNAKE at a set reward rate. These SNAKE will be distributed to all the stakers in the protocol.
Whenever someone purchases a bond, a set number of SNAKE is minted. These SNAKE will not be released to the minter all at once - they are vested to the bonder linearly over time. The bond payout uses a different formula for different types of bonds. Check the Minting section above to see how it is calculated.
The DAO receives the same amount of SNAKE as the minter. This represents the DAO profit.
Every SNAKE in circulation is backed by the Uroboros Finance treasury. The assets in the treasury can be divided into two categories: stablecoin and non-stablecoin.
The stablecoin balance in the treasury grows when bonds are sold. Backing per SNAKE is calculated differently for different mints types.
For reserve mints such as DAI minting, the Backing per SNAKE simply equals to the amount of the underlying asset supplied by the minter.
For LP Mints such as SNAKE-BNB Minting, the Backing Per SNAKE is calculated differently because the protocol needs to mark down its value. Why? The LP token pair consists of SNAKE, and each SNAKE in circulation will be backed by these LP tokens - there is a cyclical dependency. To safely guarantee all circulating SNAKE are backed, the protocol marks down the value of these LP tokens.