⚖️Robust Stability Mechanisms
How LumeFi Ensures Peg Stability
Unlike traditional protocols reliant solely on bonds (which have proven insufficient), LumeFi employs multi-layered mechanisms managed by the FrogsClub Vault for exceptional stability:
📈 Expansion Phase (LUME above peg):
Supply Expansion: New LUME minted, increasing supply, easing price toward peg.
Vault Action: Excess minted LUME strategically sold for CRO, increasing FrogsClub Vault reserves.
📉 Contraction Phase (LUME below peg):
Elastic Rebasing: Automatic daily negative rebases (up to -2%) reduce supply, driving LUME price upward.
Collateral Redemption: Users burn LUME to redeem CRO directly from the Vault, reducing circulating supply.
Vault Buybacks: Vault utilizes accumulated CRO reserves to repurchase undervalued LUME, supporting price recovery.
📌 LUME Expansion Allocation (When Above Peg)
Boardroom Rewards
60%
FrogsClub Vault (Collateral)
30%
Dev & Marketing
10%
Last updated