I’ve seen projects write “the price will be no lower than 70% of the issuance price” into their mechanism goals, alongside projections of the pool doubling and the price increasing tenfold.
I respect those who design mechanisms, but there’s a world of difference between a mechanism goal and a redemption commitment: it takes reserves, contract implementation, and testing under extreme market conditions.
The criteria are simple: Where will the money to support the price come from? Who has the authority to use it? And in extreme circumstances, who gets protected first? If they can’t answer these three questions, “price support” is just a nice-sounding phrase.
I respect those who design mechanisms, but there’s a world of difference between a mechanism goal and a redemption commitment: it takes reserves, contract implementation, and testing under extreme market conditions.
The criteria are simple: Where will the money to support the price come from? Who has the authority to use it? And in extreme circumstances, who gets protected first? If they can’t answer these three questions, “price support” is just a nice-sounding phrase.
