Smart Dollar
Smart Dollar (SD) is an BEP-20 self-stabilizing decentralized censorship-resistant non-collateral backed BUSD stablecoin. SD is a fully decentralized stablecoin that unlike centralized coins, e.g. USDT, has no 1:1 backing through a centralized USD treasury. To be highly capital efficient it does not use any collateral, like DAI or sUSD. The voluntary elastic supply mechanic is different from Ampleforth (AMPL) and Based (BASED). It is inspired by Empty Set Dollar (ESD) yet responds faster to market demand through more frequent epochs, extended supply caps, and a modified supply extension/contraction formula. The goal of a stablecoin is not to always be worth 1 USD, but to always be almost worth 1 USD. Even centralized stablecoins such as Tether experience price volatility. Decentralized stablecoins such as DAI can experience even greater price amplitudes. Different stablecoins employ different mechanics to return to the USD peg. SD is built to become more stable over time. Due to its self-stabilizing mechanism SD is expected to experience elevated volatility in the initial stages. At maturity, SD aims to vacillate close to 1 USD. SD uses an elastic supply mechanic. As market demand for SD increases, the price of SD increases above the 1 USD peg, which causes new SD to be minted. This increases the supply of SD, returning the price of SD to the peg. There are several ways newly minted SD are distributed. In the event of supply extension, 60% of the newly minted SD will return to SD holders that have bonded SD inside the DAO, while the remaining 40% return to Pancakeswap Liquidity Providers (Oracle). Lastly, SD features a built-in debt market that handles supply contraction phases (SD price < $1). Once debt has been created, SD token holders can burn their SD to acquire Coupons. Coupons will be redeemable for newly minted SD during a supply expansion event. When burning SD for Coupons, there is always a discount applied depending on the debt ratio. Important to note is that the supply of SD changes through voluntary actions of users. Your wallet balance will never increase or decrease without your volition.
