Controlled Growth

A manageable growth currency

In the early phase, there is a soft cap of 10 million USDB deposits for minting by users. This can be increased over time as the MonoSwap grows, and the collateral can comfortably grow at the target rate.

MUSD is aimed to grow by around 10% per year:

• ~5% with yields from USDB

• ~5% from the transaction fees and yield from MonoSwap

• The number can be changed via governance voting in the future

The growth can be controlled by incentivizing the depositing or the withdrawal of USDB.

High Growth Situation

If the collateral has only 100,000 USDB inside, and with each rebase, 1,000 more USDB is allocated, this would be too big a growth rate but too few rewards for users.

• Open minting to the public to allow the increase of collateral.

• Failing this, the Mono Treasury would increase the collateral inflow and the minted MUSD at the enforced growth rate.

Low Growth Situation

If the collateral has 100,000,000 USDB inside, and with each rebase, 1,000 more USDB is allocated, this would be too small a growth rate.

• Close minting to the public

• The Mono Treasury may also stop adding to the collateral

• Next, the Mono Treasury would be deployed to incentivize the redemption of the collateral

Example:

• If 1 MUSD = 1 USDB

• We will give users a better rate of 1 MUSD to 1.1 USDB

• The extra USDB comes from the Mono Treasury for users who redeem the collateral.