Redemption Capacity Function
Definitions
Variable | Definition |
ETH | |
ETHtx, native weiWard token | |
Price of ETH gas ; | |
Collateral Ratio ; | |
ETHtx Scalar Quantity ; 21,000 | |
DEX Shield ; 0.925 ; 7.5% redemption fee, consistent with transaction fees |
Relations
One ETHtx (ξ) represents 21k gas (γ). ETHtx may be converted into ETH (Ξ) using the gas price (P):
When redeeming ETHtx, a realized gas price can be calculated from the amount of ETH received (Ξout) after redeeming an amount of ETHtx (ξin):
The collateral ratio (C) may be calculated by comparing the contract’s ETH supply (Ξ on AMM) to the contract’s ETHtx supply (ξ outstanding):
Redemption Capacity Function
Graphical Representation
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