This will certainly lead to new issues and questions.
Test cases from examples in the proposal
Scenario 1: Price is below Peg of $1USD (X>Y)
In this scenario the Seller creates a sell order of $1USTC for $0.95USD, the Buyer pays $0.95USD for the $1USTC, the Seller receives $0.90USD and the protocol receives $0.05USD in divergence fees.
(We will not see this activated in the protocol until we are actually at $1USD if at all, this will not feature in the initial stages of the incremental repeg plan)
In this scenario the Seller creates a sell order of $1USTC for $1.10USD, the Buyer pays $1.10USD for the $1UST, the Seller receives $1.00USD and the protocol receives $0.10USD in divergence fees.
faffyswap
commented
1 year ago
Initial iteration for the divergence protocol
This will certainly lead to new issues and questions.
Scenario 1: Price is below Peg of $1USD (X>Y)
In this scenario the Seller creates a sell order of $1USTC for $0.95USD, the Buyer pays $0.95USD for the $1USTC, the Seller receives $0.90USD and the protocol receives $0.05USD in divergence fees.
X(Target Peg Price) – Y(Market Price) = T(Divergence Fee)
$1.00 - $0.95 = $0.05
Scenario 2: Price is above Peg of $1USD (X<Y)
(We will not see this activated in the protocol until we are actually at $1USD if at all, this will not feature in the initial stages of the incremental repeg plan)
In this scenario the Seller creates a sell order of $1USTC for $1.10USD, the Buyer pays $1.10USD for the $1UST, the Seller receives $1.00USD and the protocol receives $0.10USD in divergence fees.
Y(Market Price) – X(Target Peg Price) = T(Divergence Fee)