STATIK Update — Next evolutionary steps
As we are approaching our January 5, 2022 launch (exact date may vary depending on market conditions), we have taken the next evolutionary steps in development regarding STATIK, the Thorus platform stable coin.
Want to learn more about the Thorus platform before reading this article? Check this out first!
To preface, we have modeled dozens of different scenarios with outside research and review from partners to arrive at the following changes. One such change we considered implementing was a time lock on mint/redeem transactions to allow the previously derived formula enough time to stabilize the peg through bouts of high realized volatility. However, while it gave a more robust performance metric, we have decided against locking STATIK transactions as we felt it was important to give investors the most flexibility with their investments.
Instead, we have reached what we believe is a fair compromise involving two specific tweaks.
The first change involves increasing the mint fee from 0.4% to 1%, paired with an increase of the redeem fee from 0.7% to 1.9%. These increases allow for more USDC backing to stabilize the peg of STATIK during times of volatility. In addition, the introduction provides a deleveraging of the 20% THO collateral rate over time. We have predicted the first 1-2 months to be the most volatile. Therefore, these fees will be dynamic after the second month as our goal is to return the fees to their original values once the ecosystem stabilizes. We will gradually decrease the percentage taken starting month three if STATIK is stable.
The second change we are implementing is a more dynamic emission re-allocation for STATIK backing. Initially, we are taking 10% of the Farm section emissions to stabilize the peg as THO inevitably shifts in price. However, according to some of the models we have built, it has been calculated that if 15m STATIK were to be minted at an average THO price of $2.5 and the price of THO were to drop 50% during the first month, 60% of Farm emissions would need to be re-allocated to ensure STATIK stability.
This is too large a risk to have solely on Farming APRs. As such, we have opted to include a scalable rate derived from the Platform Reserve, which will be used during extreme times of volatility. The rate of acceptable realized volatility will progress as the months after launch pass. Additional models will be built to balance reliable stability and attractive APRs.
Final numbers for the Staking section
As you may know, an interesting feature of the Staking section is that the staking rewards are auto-compounded, which means that they are automatically re-added to holder stake in order to generate and earn a higher APY (Annual Percentage Yield).
A 4% performance fee will be collected on each harvesting of pending rewards (note: not on deposits!) every time the “Harvest” function is called.
These fees will be deposited into the Treasury, which will help support the backing price of THO, which passively assists STATIK stabilization. In addition, this balance could also be deposited directly into the STATIK contract to force peg compliance in more extreme instances.
Our objective is to minimize the time STATIK depegs take to return to peg while reducing the impact stability has on the remainder of the platform. There are dozens of data points we are factoring in — therefore, any changes implemented at any point are subject to change and morph to fit the environment of the time. As always, we will update our community with any future developments.
To reward “harvesters”, a bounty representing 0.05% of all pending rewards will be paid out to the individual that triggers the “Harvest” function!
This percentage applies to pending rewards available since the last time the “Harvest” function was called.
Initial Farming Pairs
Our goal is to capture as much volume as possible through our swap to generate fees, which will allow our Treasury to buy back THO. This buyback will also help stabilize STATIK due to the rising backing price of THO.
Beyond this, as mentioned previously, 20% of the swap fee will be routed directly into the STATIK contract, which will deleverage its correlation to THO price movements over time. Through our research, we have determined the initial pairs listed as farmable pairs at launch. This list will morph over time to ensure we capture as much TVL as possible.
We have prioritized platform-specific pairs to help avoid platform dilution through reward emissions. We will continually balance this list to establish desirable APRs while also catering to pairs that receive the most volume.
Thorus is an all in one cross-chain DeFi Platform with an adaptable treasury system, and a token holder first approach. All protocol functions are designed to reinforce this mentality. Each feature is part of an ecosystem that continually drives value back to the THO token, benefiting holders and stakers above all.
The project also aims to be amongst the first AMM’s with Protocol Owned Liquidity (POL).
If you have any questions or thoughts, please join us on our social networks!