BOOTusd is a partially collateralized stablecoin, where the collateralization ratio for minting is variable. For those familiar with FRAX, the concept is similar except for a few key differences.

Minting BOOTusd through ICHI requires:

The Collateral Reserve and the Community Treasury are two parts of the BOOTusd collateral.

Redeeming BOOTusd for USDC requires a 0.45% redemption fee that goes to the BOOTusd Collateral Reserve (it stays in the ecosystem).

BOOTusd starts off with a 100% collateralization ratio, meaning that 1 USDC is required to mint 1 BOOTusd. Starting off in this state:

  1. Allows those without BOOT tokens to mint BOOTusd. It gives a way for people to get into the BOOT ecosystem without the BOOT token initially
  2. Initial maximum safety for BOOTusd as it can be fully redeemed with USDC in anticipation of building treasury leading to minting ratio changes

Initial BOOT Bonding

To bootstrap the initial collateralization ratio for BOOTusd, we propose a 7-day bonding event to deposit BOOT tokens into the BOOTusd treasury.

Bonding will be a matter of sending BOOT tokens to the treasury. A dripping contract will enable contributing addresses to claim the vested share of their tokens during a 4-month linear vesting period.

At the end of the vesting period, participants will have received twice as many BOOT tokens as they deposited, corresponding to an average APY of 300%. Such incentive will come from the ecosystem fund and will have to be voted by the community beforehand.

We are aiming at a cap on 1/3rd of circulating supply of BOOT tokens to be bonded during this event, with a target collateralization ratio of 85~90%.

By depositing BOOT tokens in the BOOTusd Community Treasury, participants will increase the collateralization of BOOTusd, hence helping to decrease the collateralization ratio of USDC vs BOOT to mint.

Currently the collateralization ratio is of 100%, meaning a user needs 100 USDC to mint 100 BOOTusd. We want to decrease this ratio so that ideally a user would need 80 USDC and 20$ worth of BOOT tokens to mint 100 BOOTusd.

As it was announced, we intend incentives to accrue to BOOTusd holders. Decreasing the collateralization ratio would mean effectively creating a token sink for BOOT tokens to mint the incentive accruing BOOTusd.