Convertibility
Dual-Mechanism Design
Core Concept
Convertibility is a design principle for the 3 ecosystem's operational logic. It combines two mechanisms intended to manage the protocol's internal valuation parameters.
Key Mechanisms
Convertibility is implemented through two interdependent modules:
The Settlement Pledge: A programmed module that enables an exchange of 1 GUILD for 1 crvUSD. This exchange is executed according to the module's available liquidity and governing logic, establishing a foundational operational parameter for GUILD within the system.
The Protocol-Controlled Reserve: A module for managing the protocol's reserve assets (e.g. ETH), which are accumulated through its automated operations. This module is designed to represent a long-term store of value for the protocol.
System Outcome
For a Participant: The Settlement Pledge module provides a programmed mechanism to exchange GUILD for crvUSD. The growth of the Reserve is a system parameter intended to support long-term operational logic.
For the Protocol: The design aims to create a system where initial operational parameters are supported by a programmed exchange module, while long-term logic is supported by an internally accumulated asset reserve.
Convertibility is a design principle that combines a programmed exchange mechanism with a long-term asset management module.
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