Price Stability Mechanisms
Target Price
The MDS target price has two distinct primary functions on the midas platform:
It is used to calculate the collateral-to-debt of a vault
It is used to determine the value of collateral assets MDS holders have to repay at the moment of closing the vault
The Target Price is denominated in USD and starts at 1, translating to a 1:1 USD soft peg.
veinHades Insurance Pool
The veinHades pool, built out in $HADES, serves as the insurance fund of MDS and helps safeguarding the peg to its 1:1 USD soft peg.
The pool is fed via different streams:
Direct deposit of $HADES holders wishing to obtain veinHades to participate in governance
50% of Hadeswap’s Protocol Owned Liquidity (POL) profits
100% of midas’ revenue
Until 29/5/2023 11:59PM UTC, the veinHades:$HADES ratio is guaranteed to be 1:1, as after that date, we will deposit the backlogged $HADES and the APY will start running on the veinHades pool. The ratio will then be adapted depending on the $HADES being in the veinHades pool.
The insurance fund can be used as a last resort to guarantee the target price to MDS holders. It is used in case of serious emergencies, such as long term market irrationality, hacking or security breaches.
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