Equilibria Protocol Functions - EquilibriaCC/Equilibria GitHub Wiki

The Equilibria Protocol has three core functions:

A. To determine a robust, accurate, decentralized, and difficult to manipulate issuance and redemption exchange rate for conversions to and from XEQ and USDQ.

B. To assure that this issuance and redemption process, combined with normal mining and oracle node payouts, cannot result in hyperinflation and collapse of the XEQ⇌USDQ ecosystem.

C. To perform correct, fair, and permanent issuance and redemption accounting for XEQ⇌USDQ conversions.

Individual components of the protocol serve each of these core functions.

Ribbon. The automated system for monitoring exchange trading and volume data, writing it into the XEQ blockchain, and aggregating it as an exchange rate for mint and burn to and from XEQ⇌USDQ.

Oracle Nodes. Dedicated, decentralized, community-run servers that query exchanges for Ribbon data, write it into the XEQ blockchain, approve mint and burn functions, and help monitor transactions along with proof of work mining in exchange for node holders earning part of the XEQ block reward. The Reward payout goes 50% to the miners and 50% to oracle nodes. To run an oracle node, operators must stake a set amount of XEQ for a set period of time.

Emissions + Reserve Fee Redistribution. To discourage XEQ supply inflation from issuance or redemption, higher fees are charged during periods of price volatility. These excess fees are written into the block header as a ‘reserve’ for use as future payments to miners and node holders in place of new emissions.

This creates a feedback loop to dampen the effects of inflationary events. Additionally, current emissions will be reduced prior to stablecoin mainnet until they reach a post-launch target of 17 new XEQ emitted per-block (combined across mining/staking/issuance and redemption emissions up until 84 million coins, after which time only fees will pay miners and oracle node holders).

Issuance and Redemption. Works in two directions. The permanent destruction of XEQ to create US dollar-pegged USDQ according to market rates, and the permanent destruction of USDQ to restore a US dollar value of XEQ at future market value.

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