1. Overview of the TON Blockchain
TON (Telegram Open Network) is a powerful and versatile blockchain platform with high scalability, speed, and security. TON utilizes the advanced Proof-of-Stake (PoS) consensus mechanism, enabling the processing of millions of transactions per second with low costs. The layered architecture of TON includes the leading blockchains (masterchain) and the subsidiary blockchains (workchain), optimizing performance and customization for various applications.
TON also integrates intelligent contract features and the TON Virtual Machine, allowing for the flexible and efficient development and deployment of decentralized applications (DApps). By combining sharding technology and the Byzantine Fault Tolerance (BFT) consensus mechanism, TON ensures the consistency and security of data across the entire network.
2. The process of minting and redeeming TonUSD
The process of minting and redeeming TonUSD is designed to be simple, transparent, and efficient:
Only users owning Minter NFTs can mint TonUSD based on the Quota of that NFT. Similarly, only users owning Redeemer NFTs can redeem TonUSD and receive the corresponding TON amount.
Mint TonUSD:
- Users utilize TON to mint TonUSD.
- The system will mint a new amount of TonUSD corresponding to the value of TON provided by the user.
- The newly minted TonUSD is then transferred to the user’s wallet.
- Simultaneously, the system mints an amount of TonUSD corresponding to the value of TON provided by the user and adds it to the TonUSD/TON liquidity pool.
For example, if a user utilizes TON worth $500 to mint, they will receive 500 TonUSD.
Redeem TonUSD:
- Using a certain amount of TonUSD to redeem
- The system burns that amount of TonUSD
- The system withdraws liquidity from the TonUSD/TON pool and returns the corresponding value of TON to the user’s TonUSD amount
- The system burns the remaining TonUSD
Example: A user redeems 500 TonUSD. The system returns TON worth $500 to the user.
The entire process is carried out automatically through smart contracts, ensuring transparency, safety, and high efficiency.
3. The mechanism for maintaining the stability of TonUSD
- Fee Sharing Pool (Treasury Pool)
Profits generated from minting fees, redeeming fees, swap fees, and NFT sales fees will be directed into the Treasury Pool. Users can stake TonUSD to participate in profit sharing from this pool.
- Quota
Quota is the predetermined value assigned to each NFT sold. There are two types of NFTs: Minter NFTs and Redeemer NFTs.
NFT owners are only allowed to redeem/mint within this quota limit each month. At the beginning of each month, the quota will be replenished. This mechanism is designed to control the mint/redeem rate, preventing the system from becoming excessively “hot.”
Silver NFT: 100 TonUSD/month
Gold NFT: 550 TonUSD/month
Diamond NFT: 6000 TonUSD/month
Through minting/redeeming, users can earn up to 10% of the quota value each month.
- Mint Fee
The mint fee is designed to counteract the onslaught of trading bots. It’s crafted to ensure that NFT minters can earn a maximum profit of 10% per month on the quota value.
If TonUSD <= 1.1
Fee = 0
If TonUSD > 1.1
Fee (%) = price(TonUSD) – 1 – 10%
Illustration board:
| TonUSD Price | Mint Fee |
| 0.9 | 0% |
| 1 | 0% |
| 1.1 | 0% |
| 1.15 | 5% |
| 1.2 | 10% |
| 1.3 | 20% |
According to the formula above, in all cases, Minter can only achieve a maximum profit of 10% each time they mint TonUSD from the system.
The fees collected will be deposited into the Treasury Pool. Users can stake TonUSD to share rewards from this pool.
- Redeem Fee
The redemption fee should be designed so that it is neither too high nor too low to serve Redeemer’s goal of balancing monthly profits. The formula below helps ensure this criterion
If TonUSD >= 0.9 USD
Fee = 0
If TonUSD < 0.9 USD
Fee (%) = 1 – price(TonUSD) – 10%
Illustration board:
| TonUSD Price | Redeem Fee |
| 1.2 | 0% |
| 1 | 0% |
| 0.9 | 0% |
| 0.85 | 5% |
| 0.8 | 10% |
| 0.7 | 20% |
This will slow down the withdrawal of TON from the system.
The fees collected will be deposited into the Treasury Pool.
- Cool down claim time
This is the time required for Redeemers to claim the portion of TON they have redeemed. The time frame is 7 days.
For example, if a user redeems 1000 TonUSD, the system will withdraw $1000 worth of TON from the liquidity pool to pay the user. However, the user can only claim this amount of TON after 7 days.
This Mechanism will make Redeemers consider carefully when performing a redeem, as there is a risk of TON price depreciation within the 7 days.
- Phoenix Mechanism
The Phoenix mechanism is a safety mechanism activated to restore TonUSD to a price of 1 USD. The mechanism is described as follows:
Activation conditions: TonUSD price is below 0.9 USD continuously for 30 days or TonUSD price < 0.5 USD.
The process of the Phoenix mechanism:
– The redeem function is locked for everyone.
– Thirty new NFTs are minted daily by the system and put up for auction.
– All TON acquired from the auction will be used to buy TonUSD from the pool and burn it. This will reduce TonUSD and increase the TON supply in the pool, bringing the TonUSD price back to 1 USD.
– The mechanism ends when TonUSD >= 1 USD.
After the Phoenix mechanism is completed, the TON deficit in the pool has been compensated for, and the TonUSD price returns to 1 USD. The Phoenix mechanism ends, and the owner of the Redeemer NFT can continue to use the redeem function.
- The Dragon Mechanism
The Dragon mechanism is activated to inject Minter NFTs into the market. This Mechanism will be triggered if the demand for TonUSD is excessively high, causing the price of TonUSD to exceed $1.1 for an extended period.
Activation condition: TonUSD price > $1.1 continuously for 30 days.
Dragon event procedure:
– Each day, 30 NFTs are newly created and auctioned.
– The TON tokens acquired from the auction will be provided by the system as liquidity to the TonUSD/TON pool.
– The event ends if the TonUSD price <= $1 USD.
4. Management and Security System
TonUSD is committed to maintaining the highest standards of management and security to protect the assets and interests of its users.
Management:
- TonUSD is managed by a team of professional developers and administrators with experience in blockchain and finance.
- Major decisions regarding TonUSD are made through community voting, ensuring transparency and participation of stakeholders.
- All activities and transactions of TonUSD are recorded on a distributed ledger and can be audited by anyone.
Security:
- TonUSD employs advanced encryption protocols and best security practices to safeguard user data and assets.
- TonUSD smart contracts are thoroughly audited and verified by security experts to ensure no vulnerabilities or risks.
- Multilayer security measures, including multi-factor authentication and cold storage, are applied to protect user reserves and assets.
- TonUSD also implements stringent insurance policies and risk management to minimize the impact of unexpected or adverse events.
With this robust management and security system, TonUSD builds trust and peace of mind for users, contributing to the healthy and sustainable development of the TonUSD ecosystem.
TON