How to Utilize Swap&Burn Pool
The SLD token captures value using a buyback and burn program, utilizing the transaction fees accumulated in the fee pool. Every token holder has the right to initiate the buyback-burn smart contract. The value of the SLDs mined is redeemed by Swap&Burn contracts. Shield generates a repurchase price by making the current SLD pool always equal to 100% of the repurchase pool value (derived from trading fees). Once the current pool SLD amount drops below 50,000 SLD, another 100,000 is added and the new round begins.
Stablecoin received = SLD used for buyback * Total stable coin pool / Current round SLD pool
To explain Swap&Burn further, when the secondary market price of SLDs is higher than this price, then the value of the Swap&Burn pool keeps growing because no one comes to swap.
When the secondary market price falls below this price, someone will go to the secondary market and buy the SLDs to redeem the contracts for the difference, thus ensuring a minimum price in the secondary market (which is similar to the price valued by PE in stock valuation).
While the transaction fees for the left Swap&Burn pool will grow with business without a cap on growth, the SLD pool in circulation on the right will continue to deflate as destruction and mining rewards are cut in half. In the long run, this pass-through design guarantees a bullish coin price.
Swap is very straightforward. Go to Shield Swap&Burn page, then input the assets and amount you wish to swap, press SWAP is done.
Link: https://shieldex.io/dds.html#/swap-burn
Last modified 3mo ago
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