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Technical Concepts

Minting

Mint stable tokens for exactly $1 of value per stable token by sending project tokens and $USDC.
Branded Dollars are minted by you with your non-hosted Ethereum wallet. There is no issuing entity, bank, or any other counter-party. You pay exactly $1 of value in two parts to mint a Branded Dollar:
A minting ratio specifies how much USD hard pegged stable token versus how much of a native cryptocurrency you pay to mint a Branded Dollar. For example, you might pay $0.90 $USDC and $0.10 $wBTC to mint $oneBTC (the stable token for Bitcoin) at a 90% minting ratio.
Projects creating Branded Dollars are incentivized to lower minting ratio in order to lock in more native tokens in the treasury when minting. While a lower minting ratio is preferred, it exposes the Branded Dollar Collateral to more of the risk in holding a large percentage of the Treasury in volatile crypto assets. Therefore the minting ratio is subject to change at any time based on ICHI governance safety parameters.

Redemption

Redeem Branded Dollars for exactly $1
Each Branded Dollar (ie, $oneFOX) can be redeemed for exactly 1 $USDC (or other USD hard pegged stable token in the treasury), minus a small redemption fee. A Branded Dollar redemption can only come from the Collateral Reserve. The cryptocurrency paid to mint isn't repaid to any token holder by the system. Instead, it remains in the Treasury contract and allows communities managing the Treasury to vote on how to hold/manage/invest it subject to ICHI Governance safety parameters.

Collateral Reserve

Branded Dollar’s USD hard pegged stable token Collateral Reserve
There are two types of reserves backing an ICHI Branded Dollar: the USD hard pegged stable token known as collateral stored in Collateral Reserve and the native project tokens stored in the Community Treasury. Each of these reserve assets are visible on-chain and managed via the Branded Dollar community (the DMA).

Collateral Reserve

  • Contains only stable assets
  • May be deployed in various principal protecting strategies
  • Can be managed via Community Governance*
Upon redemption of a Branded Dollar, you may claim $1 of collateral reserves while supplies last. Branded Dollars can accept multiple stable tokens for Collateral. Therefore, the amount of each stable token is an upper limit of how much can be redeemed of that specific stable token. E.g. If the contract accepts $USDC or $USDT as Collateral then the user may be forced to accept multiple stable tokens when redeeming if their Branded Dollar holdings are larger than the Collateral of a single stable token.
*Collateral Reserves deployed to yield-baring strategies across DeFi will be shown as “Collateral Positions” in the ICHI UI. This means the Collateral is in a strategy and cannot be redeemed until funds are removed from that strategy and put back directly into the Collateral Reserve contract (the Branded Dollar contract itself). To learn more about this architecture please see the Developer Section .

Community Treasury

Native project token backed Community Treasury
When minting a Branded Dollar, you pay $1 in value in a mixture of USD hard pegged stable token and the Branded Dollar’ specific native project token. The native project tokens remain in a Community Treasury because redeeming Branded Dollar will only return stable tokens from the Collateral Reserve. The Branded Dollar community decides what to do with this treasury by voting through their own DAO governance system.
Proposals may include the following actions:
  • Selling tokens to buy more $USDC and deposit it to the collateral
  • Allocating the tokens in DeFi (decentralized finance) contracts and receiving yield*
  • Paying adoption incentives for users to spend or save the Branded Dollar
  • Paying grants to build applications and systems that support the Branded Dollar
  • This is not an exhaustive list. The community may propose and vote on additional proposals subject to ICHI governance safety measures.
*Treasury assets deployed to yield-baring strategies across DeFi will be shown as “Treasury Positions” in the ICHI UI. This means that these assets are in a strategy contract deployed to earn yield for the Branded Dollar Treasury. To learn more about this architecture please see the Developer Guide .

Treasury Reserve Ratio

The Treasury Reserve Ratio shows how 'over-collateralized' a Branded Dollar is. This happens when the sum (in USD) of the $USDC collateral and the Community Treasury is more than the number of circulating stable tokens. The possible drivers of over-collateralization may include the following:
  • Minting and/or redemption fees stay in $USDC reserves.
  • Treasury tokens grow in value.
  • Addition of tokens into the Community Treasury (anyone may do this). Addition of stable assets into Collateral (anyone may do this).
  • Deployment of Collateral or Treasury funds to yield-baring investment opportunities across DeFi (subject to community vote and approval).
  • This is not an exhaustive list and the implementation of some (or all) of these drivers is determined by a project's community.
How to Calculate Reserve Ratio:
  • Treasury Backed = Minted - (collateral + collateral position) - (Minted * Redemption Fee)
  • Reserve Ratio = (Treasury + Treasury Positions) / Treasury Backed
A Branded Dollar’s treasury can be used on any proposal passed by the holders of that Branded Dollar and in capital deployment strategies built by and voted for by the Branded Dollar community. An example of actions a Branded Dollar community could take to build their Community Treasury:
  • Contribute liquidity to ICHI Branded Dollar pools, receive ICHI rewards.
  • Pair ICHI with treasury asset, provide to ICHI liquidity pools, receive more ICHI rewards.
  • Re-allocate to other projects and in systems to drive adoption.
  • Provide better interest when saving, increasing Branded Dollar adoption.
  • Provide discounts when spending, increasing Branded Dollar adoption.-

Treasury Positions

A Branded Dollar’s treasury can be used in multiple capital deployment strategies based on proposals passed by the Branded Dollar community (DMA). An example of actions a Branded Dollar community could take to build their Community Treasury:
  • Contribute liquidity to ICHI Branded Dollar pools and earn fees
  • Deploy directly to a crypto token’s native community protocol and any of its yield-baring opportunities (staking, farming, etc.)
  • Deploy to ICHI infrastructure (i.e. Angel or HODL Vaults)
  • Re-allocate to other projects and in systems to drive adoption