Price Stability Mechanisms
Target Price for BTU
BTU is pegged to the US dollar at a 1:1 ratio, making its target price $1. BTU's value is secured by a collateralization ratio exceeding 1:1, ensuring that the stablecoin remains robust against market fluctuations. A liquidation mechanism is in place to prevent the devaluation of BTU by liquidating positions when the collateral value falls below a predetermined threshold.
Emergency Shutdown
Emergency shutdown serves as the final safety measure to protect the system from sudden attacks, severe market fluctuations, and other critical situations. These situations may include malicious governance actions, unauthorized access, security vulnerabilities, and prolonged market irrationality. Additionally, an emergency shutdown may be initiated when the protocol undergoes a significant upgrade.
Users holding governance tokens can initiate an emergency shutdown by depositing their tokens into a designated module. Once the total amount of deposited tokens reaches a predetermined threshold, the system will trigger the shutdown. Upon activation, all system functions, including staking, repayment, and liquidation, will be halted. However, the basic functions of BTU as a token will remain unaffected.
Emergency Shutdown Process:
Token Deposit: Governance token holders deposit their tokens into the designated emergency shutdown module.
Threshold Achievement: The total amount of deposited tokens reaches the predefined threshold.
Shutdown Initiation: The system automatically triggers the emergency shutdown process.
System Halting: All system functions, except for basic BTU token functionalities, are paused.
Protocol Upgrade (if applicable): If the shutdown is initiated for a protocol upgrade, necessary upgrades are implemented.
System Restart: Once the emergency situation is resolved or the upgrade is completed, the system is restarted, and normal operations resume.
Key Points:
Purpose: To protect the system from critical threats and ensure its long-term stability.
Trigger: A predefined amount of governance tokens deposited into the emergency shutdown module.
Impact: All system functions except basic token functionalities are halted.
Recovery: The system is restarted once the emergency situation is resolved.
Additional Considerations:
Governance: The specific details of the governance process for initiating an emergency shutdown should be clearly defined.
Communication: A clear communication plan should be in place to inform users about the emergency shutdown and its implications.
Security: Robust security measures should be implemented to protect the emergency shutdown mechanism from unauthorized access.
Reversibility: The process for reversing an emergency shutdown should be well-defined, especially in cases of accidental or malicious activation.
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