Fluid algorithmic tokenomics

LION token is designed to be used as a medium of exchange. The built-in stability mechanism in the protocol aims to maintain LION peg to 1 DAI in the long run. This is achieved by having algorithmically determined contraction and expansion phases to adjust the supply of LION to bring it closer to peg.

Expansion Phase

When LION time weighted price average (TWAP) is above 1.01 DAI the protocol is in expansion phase. This means the total supply of LION will expand every EPOCH *TIME to bring price closer to peg. This expansion is distributed to LSHARE/DAI LP stakers every epoch that we are in expansion phase.

Contraction Phase

Tokens will not be minted at epochs when twap is below DAI Current Market Price (Peg).

In Epochs the protocol is below peg token holders will burn LION to purchase LBOND. This will lower the supply and help bring LION back up to peg. LBONDs can be redeemed for LION at a premium once we are back in expansion phase.

Note that LION actively pegs via the algorithm, it does not mean it will be valued at 1 DAI all times as it is not collateralized . LION is not to be confused for a crypto or fiat-backed stablecoin.

LSHARE - Roaring Lion Shares

LSHARE are one of the ways to measure the value of the Roaring Lion Protocol and shareholder trust in its ability to maintain LION close to peg. During epoch in expansion periods the protocol mints LION and distributes it proportionally to all LSHARE/DAI LP holders who have staked their tokens in the Boardroom.

LSHARE holders have voting rights (governance) on proposals to improve the protocol and future use cases within the Roaring Lion finance ecosystem.

LSHARE has a maximum total supply of 83,000 tokens distributed as follows over X time:

  1. 40% - 33,000 LSHARE will be allocated to DAO Fund

  2. 60% - The remaining 50,000 LSHARE will be allocated to incentivize Liquidity Providers

LBOND - Roaring Lion Bonds

Roaring Lion Bonds (LBOND) main job is to help incentivize changes in LION supply during an epoch contraction period. When the TWAP (Time Weighted Average Price) of LION falls below 1 DAI, LBONDs are issued and can be bought with LION at the current price. Exchanging LION for LBOND burns LION tokens, taking them out of circulation (deflation) and helping to get the price back up to 1 USDC. These LBOND can be redeemed for LION when the price is above peg in the future, plus an extra incentive for the longer they are held above peg. This amounts to inflation and sell pressure for LION when it is above peg, helping to push it back toward 1 DAI.

LBOND will be able to be redeemed after an expansionary epoch. Every epoch expansion period a % of the LIONs to be minted for LSHARE stakers will be claimable by bond holders instead. This is know as the debt phase. After all bonds are redeemed LSHARE stakers will receive full share of expansion again.

Last updated