Maintaining $TEMPLE price
RAMOS will be active whenever the token price diverges from the Treasury Price Index (TPI). However, the TPI is not a hard floor and at times $TEMPLE will trade at a discount or a premium to the TPI. This trading range is referred to as the TPI trading range.
- RAMOS will periodically rebalance and single-asset withdraw TEMPLE liquidity from the LP and burn the tokens to raise the $TEMPLE price in the Balancer pool.
- RAMOS will always trigger a rebalance and single-asset withdraw TEMPLE liquidity from the LP and burn the tokens to raise the $TEMPLE price in the Balancer pool.
- RAMOS will single-asset deposit $TEMPLE into the LP to recapitalize the pool. Alternatively, RAMOS may single-asset withdraw stables as a novel bonding system to recapitalize the Treasury during periods of strong demand.
Furthermore, RAMOS was designed to take advantage of volatility in a way that is less susceptible to MEV attacks and front-running that can plague other PSM systems:
- Randomized Timing: RAMOS does not rebalance on a fixed schedule. There is a randomization logic which will be applied to see if and how large of a rebalance should occur. At current settings, a rebalance will be triggered 2–3 times per day on average. If the $TEMPLE price falls too far below the policy bound, a rebalance will be triggered automatically to protect the TPI.
- Randomized Rebalance to Raise the Price: The number of Balancer Pool Tokens (BPT) that RAMOS will use to rebalance the liquidity pool is also randomized. RAMOS will calculate the number of BPT tokens required to fully close the gap between current price and TPI and check the price impact of the operation. Then it will extract anywhere between 50%-100% of that number to single-asset withdraw tokens.
- Randomized Rebalance to Recapitalize the Pool: When spot price trades above TPI, RAMOS will close anywhere from 1% to 10% of the gap between the current price and TPI per rebalance event by depositing more TEMPLE tokens to recapitalize the pool. Rebalances to the downside are designed to be mild to encourage organic price discovery and to allow $TEMPLE to trade at a premium to the TPI.
- Price Discovery on the Upside: If TEMPLE were to trade at a large premium relative to TPI the percentage rebalance range would be adjusted downwards to encourage price discovery. For example if TEMPLE is trading at a 100% premium to TPI, the rebalance % would be around 0.1% - 0.3%.