Peg Mechanism

Delea employs a comprehensive approach to ensure $DONE's stability and maintain its peg to the US Dollar. This system incorporates over-collateralization, incentive mechanisms, and market arbitrage.

Over-Collateralization: Each 1 $DONE is secured by at least $1.25 worth of TON and LST (Liquid Staking Tokens) as collateral. By maintaining over-collateralization, Delea ensures stability by guaranteeing that the value of the collateral backing $DONE is always greater than the value of $DONE itself. This extra collateral acts as a safety buffer, reducing the risk of default and providing security to $DONE holders.

Liquidations are triggered at 125% CR (Collateral Ratio).

Delea's liquidation mechanisms are designed to manage undercollateralized positions effectively. If a user’s CR falls below the safety threshold, anyone can step in as a Liquidator. This involves purchasing the at-risk collateralized LST and paying with an equivalent amount of $DONE, adjusted for the Liquidation Reward Rate. This process not only creates upward pressure on $DONE's value but also contributes to the protocol's overall stability.

Incentive Mechanisms:

• Interest Fee: An interest fee incentivizes timely loan repayment and collateral management.

• Liquidation Penalty: A minimum 10% penalty on liquidations encourages users to maintain a healthy CR of their positions.

Market Arbitrage: Price stability is reinforced through market arbitrage, which helps correct any significant deviations from the peg.

• When $DONE Price Is Above 1 USD:

  • Minting and Selling: If $DONE’s price exceeds 1 USD, users can mint new $DONE by providing collateral ($TON, $StTON, and $tsTON) and sell it on a decentralized exchange (DEX).

  • Market Impact: The increased supply of $DONE from these sales helps bring its price back toward 1 USD.

  • Profit Realization: Users can profit by repurchasing $DONE at a lower price later or using it to repay loans.

• When $DONE Price Is Below 1 USD:

  • Buying Discounted $DONE: Users can purchase $DONE at a lower market price.

  • Redemption Process: They can then redeem the discounted $DONE within Delea for 1 USD worth of collateral assets like $TON.

  • Market Correction: This redemption increases demand for $DONE, pushing the price back up to 1 USD.

  • Profit Opportunities: Users can either keep the redeemed collateral or sell it, benefiting from the price difference.