WaykiChain, Maximum Resource Protection
First of all a cordial greeting to all the academic and scientific community of Steem, in the present opportunity I come to talk about the great investment opportunity with cryptocurrency called WaykiChain, which has one of the best protections in terms of reserve funds to avoid risks.
Risk Reserve Fund
WaykiChain's platform has a risk reserve fund considering that, systemic risk is that volatility of collateral prices may lead to abnormal CDP insolvency. Therefore, the risk defense mechanism is essential. During liquidation, the Liquidator is the first defense against system risk, and the Risk Reserve Fund is the second defense.
Public Domain Image taken at: PixaBay
They in turn rely on the WUSD stored in the Risk Reserve Fund which mainly comes from two parts:
1) Assets collected from the issuance of WGRT will be exchanged for risk reserves; 2) When the system has settled, a portion of the penalty will be put into the Risk Reserve Fund.
Emergency Closure
WaykiChain's platform when the market encounters black swan events, can cause the value of assets to depreciate below the value of the obligation.
When the overall collateralization rate (the total value of WICC collateral in all PDCs / the total value of WUSD value in the market) falls below 80%, the automatic protection mechanism will be triggered to suspend all trades related to PDCs. After the market stabilizes or recovers the community can initiate a restart proposal.
Public Domain Image taken at: PixaBay
Regulation of supply and demand
In addition to having a system to regulate supply and demand, whereby the price of WUSD is pegged to USD 1, while in the secondary market, it is pegged to USD due to changes in supply and demand.
Therefore, in addition to using the clearing mechanism and the risk reserve to guarantee the value of the collateral on the value of the issued stablecoins, it is also necessary to respond to the fluctuation of the WUSD price in the secondary market.
If the value of the WUSD is above USD 1 in the long term, theoretically, the arbitrage behavior of the market can drive the price back. However, the arbitrage path is long, and there is an additional risk of fluctuations in asset values. Therefore, the effect of market self-regulation is difficult to forecast accurately. If market behavior does not work for a long time, the Governor must play a governance role. For example, lowering the interest rate, and encouraging pledgers to issue WUSD mainly.
Image Source
