What makes DarkNess Dollar different?
Inspired by the design of FRAX, a partial-collateralized token that is proven to be truly pegged to $1, and other well known forks, we have thought of a lot of ideas where we can further extend the design concept.
Instead of using only one Collateral Ratio for both the Minting and Redemption process in the original design, we will use triple different ratios: Collateral Ratio and Effective Collateral Ratio. Collateral Ratio will be used in the Minting formula while Effective Collateral Ratio will be used in the Redemption formula.
FRAX (and other forks such as IRON) uses only USDC as main collateral and FXS as share collateral. The model is simple but has limitations of the main stable supply as well as the volatility of the share price.
We use all 3 of the main stable coins in Cronos chain for main collateral: limit for supply of DUSD will be increased significantly as a combined supply of all three (615m USDC, 477m USDT and 101m DAI, which total of $1,193,000,000 at the time of writing).
DARK as one of our share collaterals has been proven to be a very good peg to CRO (chain native token): only 50% effect of share collateral part because of NESS price volatility.
The IRON bank run, which caused losses worth nearly $2 billion to investors, happened due to the price of the TITAN token and instamint (no cap of the share token minting)
Inspired by the SafeAsset model, we propose a solution to this bank run issue by setting a minting/redeeming hourly cap for DUSD, to avoid sudden changes in circulation supply of NESS to avoid flash-loan arbitrage attacks.
NESS has Max Supply of 800 million and will be fully emissied in 8 years (equivalent to two Bitcoin cycles). It’s impossible to mint more NESS. In fact, the total supply of NESS will reduce over time (protocol fee).
Unlike the original design by FRAX, there is no insta uncapped mint of NESS when redeem DUSD, all through market buy/sell. When mint DUSD, NESS will be partly sold to the assets and added to the Reserve; when redeemed, the assets inside the Reserve will be used to buy NESS to give back to users.