Introduction
Real USD introduces a new update to the system’s tokenomics, the ability to mint USDR at a 1:1 value ratio with TNGBL. Further, the criteria determining when TNGBL can be used to mint USDR has also been simplified, streamlining treasury tracking and other backend processes.
Real USD’s updates responsibly expand the pool of money that can be minted with TNGBL while also doubling the minting value of TNGBL for USDR.
Alongside the newly-established protocol-owned liquidity for TNGBL, 1:1 minting helps create a more established market for the token and gives greater stability to the TNGBL backing in the USDR treasury. With TNGBL constituting between 10–15% of the Real USD treasury (including LPs,) it’s optimal for there to be a well developed market for TNGBL, with enough liquidity to stabilize the price under normal conditions.
How It Works
As a refresher, minting with TNGBL in USDR v1 could only be done at 2:1 value ratio i.e. $200 of TNGBL got you $100 in USDR, and only once the treasury had a minimum threshold of 88% real estate + DAI + protocol-owned liquidity.
Users with unlocked TNGBL can now mint Real USD 1:1 with their TNGBL. $100 of TNGBL can be minted into $100 of USDR.
The key limitation placed on this feature is that TNGBL can not be used to mint more than 10% of the total minted amount of USDR minus the redeemed amount USDR.
Minted USDR includes USDR minted from the following sources: DAI, TNGBL, through LPs as well as USDR minted off of system gains.
Example:
- $1,000,000 of USDR has been minted (from various sources)
- $100,000 has been redeemed
- Minted minus redeemed = $900,000
- This means that a total of $90,000 of USDR can be minted by TNGBL (10% of $900k)
- If $40,000 TNGBL has already been minted into USDR, then $50,000 in USDR can still be minted with TNGBL
When calculating the totals, automated minting from system gains does count towards the total amount of USDR minted. However, even if those gains come from TNGBL appreciation, they do not count towards the amount of TNGBL used to mint USDR. Minting off gains and minting with TNGBL are completely separate functions, even though TNGBL is central to minting in both.
Conversely, yield incentives, bond incentives and any other incremental returns to USDR holders that originate with a transfer of value from TNGBL to USDR aka minting, will count toward the total amount of USDR minted by TNGBL.
Benefits
There are two primary benefits to the updated 1:1 minting with TNGBL.
Added Yield for USDR Through the Flywheel Effect
We project that the growth of USDR, and borrowing against TNFTs enabled via USDR, will very likely lead to an increase in marketplace volume. With fees from the Tangible marketplace accruing to the TNGBL token, this has positive benefits to holders of locked 3,3+ TNGBL NFTs.
Further, 1:1 minting USDR with unlocked TNGBL encourages adoption of USDR as it does not come at any incremental expense to the user. Factoring in slippage and fees when selling tokens, minting TNGBL into USDR is likely the most efficient entry into a stablecoin from TNGBL.
These features should lead to a flywheel that accelerates both USDR and Tangible adoption. This flywheel is at the core of the USDR v2 design.
Community Benefits
The new updates to TNGBL minting allow holders to immediately partake in the upside of Tangible and USDR. The newly established TNGBL liquidity satisfies demand while 1:1 minting adds token scarcity. Minting TNGBL to USDR gives holders a pathway to exit their position without selling, slippage costs or other fees, removing the tokens from the market as they enter the USDR treasury.
The matured, established market enabled by 1:1 minting and liquidity pools also provides benefits to TNGBL 3,3+ holders. Users with locked TNGBL positions now have a simple off-ramp for their 3,3+, minting matured, multiplied TNGBL into a native-yield stablecoin at the end of the vesting period. Further, the guarantee of 1:1 minting gives users confidence to mint new 3,3+ with their TNGBL, knowing their multiplied tokens can be minted back into a stablecoin at the end of the lock period.
These updates will positively impact holders of TNGBL, providing value to our community and early holders.
Conclusion
Real USD deploys an optimized approach to drive faster adoption of the ecosystem, bringing benefits to users, investors, and community while strengthening the economic outlook for both USDR and Tangible.
This is a major step forward in our ecosystem development, opening the door to the development of various new systems and updates in our protocol’s future.
