Why the new generation algorithmic stable coin WENWEN can always maintain $1?
一、What is an algorithmic stablecoin?
Algorithmic stablecoin is a kind of algorithm to adjust the total market currency, increase the market supply when the price of stablecoin is higher than the anchor price, recover the supply when the price of stablecoin is lower than the anchor price, or balance the price of stablecoin by providing arbitrage space. This model is established without anchoring the real fiat currency, without collateralizing the stable coin, and is regulated by the market will and algorithm, which is also called flexible currency.
二、Algorithmic Stable Coin Types
The market is full of algorithmic stablecoins, such as Fei, float, basis, frax, rai, ampl, esd and so on, but so far, they are still in the experimental stage, and most of the tokens have already collapsed, there is huge volatility, especially in these days, Polygon on the collateralized stablecoin project IRON Finance, whose governance token TITAN plummeted nearly to zero in the past 24 hours due to a “bank run”, has grabbed the market heat for a while.
The WENWEN token is a new generation of algorithmic stablecoin that has just recently gone live, WENWEN seeks to be the first stablecoin protocol to implement two design principles (collateralized security/fully algorithmic), namely creating a highly scalable, trustless, extremely stable and ideologically pure stablecoin. WENWEN tokens (USDN, JPYN, EURN ….) and a governance token, WENWEN Share (SHAREN). The protocol also has a contract pool of collateral, and the pool can be added or removed through governance.
WEN WEN has also recently gone through a beta test and mainnet launch with beta data of SHARE Vault $100,000,000 , number of participants: 3000 USDN: $1.00943916/0.94% Token Share: 120 times .
Current mainnet data is SHARE Vault $2570,527, USDN $1.00024198/0.02%
The stable coin USDN has basically achieved the stability of $1 during the process of test network and main network
三、 Token Mechanism
WENWEN Protocol is a dual token system, including multiple stable WENWEN tokens (USDN, JPYN, EURN ….) and a governance token, WENWEN Share(SHAREN), which is a non-stable, accrued value token of the protocol.
The total amount of SHAREN, and the distribution ratio
20% of the funds raised from user vaults
70% of mining rewards
Team share 10%, unlocked after 2 years
四、Stabilization mechanism
Every 12 hours, according to the SHARE held by the user, the stable coin, the user can get the corresponding reward, take USDN as an example: USDN is higher than 1$, claim will issue additional USDN to the user holding SHARE, USDN is lower than 1, will issue additional SHARE tokens to the user holding USDN.
Every 12 hours, you can go to the Genesis page to receive the claim dividend tokens
五、Arbitrageurs
Arbitrageur A: Stablecoin holder, low risk, low return
Earn income through the price fluctuation of stable coins. Or when the price of USDN is below $1, you can buy more stablecoins by holding more stablecoins to get more SHAREN. Since the price of stablecoin is less volatile, the risk is relatively lower.
Arbitrageur B: balanced holder, balanced risk, balanced return
By holding stablecoin and SHAREN to carry out two-way arbitrage in the market. Maximize the high-sell-low-suck operation.
Arbitrageur C: SHAREN holder, high risk, high return
By holding a large amount of SHAREN to earn the stablecoin dividend every time you claim. Since the price volatility of SHAREN is much higher than that of stablecoin, it means that you can carry out high-risk and high-reward arbitrage.
Overall, you can come and experience the new generation of algorithmic stable coin WENWEN Protocol with more optimized and stable mechanism and design rules.
White paper economic model: https://docs.wenwen.money/whitepaper-core/price-stability
About WENWEN Protocol
website: https://wenwen.money/
Whitepaper: https://docs.wenwen.money/v/en/
Discord: https://discord.com/invite/PHzNSjGkT4
Twitter: https://twitter.com/wenwenprotocol
