Demeter has set a liquidation penalty rate of 9% and a liquidation tax rate of 3%, which applies to both collateral lending and collateralizing stablecoins. Once a liquidator's account goes into liquidation state, anyone can repay the debt to the system at 103% of the liquidated person's debt and receive 109% of the collateral assets. 100% of the 103% repayment will be used by the user to repay the debt, and 3% will be fully injected into the DAO revenue pool for revenue allocation.
DAO Revenue Pool & Governance Vote
Staking DMT allows users to participate in DAO profit allocation with three incentive sources:
- After withholding the necessary costs for operations, all income generated from supplying and borrowing goes into the DAO revenue pool.
- 100% of liquidation revenue goes into DAO revenue pool.
- 50% from the excess supply goes into the DAO revenue pool.
For the initial period, users can choose the following staking terms: flexible access，7-day fixed term and 30-day fixed term. The incentive ratio for flexible access is 1.0, 7-day fixed term is 7.0 and 30-day fixed term is 30.0. Meanwhile, users will receive their DAO voting rights according to the same incentive ratio. User key parameter setting, asset allocation, etc. will be decided by DAO voting later on after the governance functions, as well as the other related mechanisms and parameters are perfected.
The DAO Treasury exists as reserve assets for project development and risk response. The use of assets is determined in a DAO manner.
Sources of funding:
- Revenue from Excess supply (transferred in the form of DUSD)
- Governance tokens for Treasury reserved assets (transferred in the form of DMT)
Use of Funds:
Price stabilization system: automatically repurchase or sell DUSD when the price of DUSD deviates significantly from USD.
- Issue DAO Voting incentives.
- Use for Grant, eco-investment, special incentives, etc. after DAO vote.
- Transfer to DAO revenue pool as an additional incentive after DAO vote.