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What is Altered?
Altered is an oracle acting as a tracker, prices are driven by the market but synthetics are elastic tokens and always go in the right direction after a rebase, price of synthetic can be queried by third parties contracts comparing Dex trading price and rebase sponsor price.
The damping factor is used to avoid sharp supply changes. The protocol spreads the supply change over a period of 10 rebases.
Create Synthetic Tokens using Altered Protocol.
Altered is designed to mix the elastic supply (eg. Ampleforth) with the creation of Synthetics Tokens and Derivatives (eg. UMA), all this managed by a DAO.
Synthetic tokens are guaranteed tokens [CW-20] whose value fluctuates according to the token's benchmark.
These tokens have 4 characteristics:
- Price identifier
- Rebase time
- Expiration date (at which the contract is settled) (optional, not available at launch)
- Collateral requirement (must be at least 600% of the value of the tokens issued nut can be changed by DAO vote, for example, to issue $ 100 USD of synthetic gold tokens would require $ 600 USD of locked cryptocurrency as collateral UST or ALTE)
The sponsor can create a synthetic token for the asset when sufficient collateral is deposited and creation fees are paid, the terms of the contract are created for the issued token and enforce them using financial incentives. Once the synthetic token is created it can be traded after DAO approval to limit spam and scam.
Every x rebase time the Sponsor must enter the price of the token for the rebase to be carried out.
- Price entered must be collateralized by the Sponsor in case of dispute
- If the price entered is higher than the old price, Sponsor has to reinforce his collateral if not the contract will not accept the rebase price.
- Synthetic price update is open before the rebase happens, during this timeframe all sponsors can update multiple time the price according to the off-chain source price of the asset being synthesized.
If someone disagrees with the Sponsor's price, he can open a dispute by depositing collateral in UST or ALTE.
- DAO receive the dispute and vote with the correct price if there is 5% price variation the sponsor
Is liquidated. If provided price by the sponsor is in the range disputer is liquidated
- Disputer can liquidate immediately a sponsor who reach the limit of 300% collateral
- Disputer open a dispute and DAO vote and liquidate the party providing the wrong information
When liquidation happens the cw20 burn message is called with the previously minted amount of the synthetic asset being collateralized.
- Liquidation fees:
- DAO get fees for voting
- Disputer get fees for winning the dispute
- Sponsors get fees for winning the dispute
Sponsor liquidation case:
When a sponsor is liquidated all his created synthetics are burned decreasing the total supply
1 - Charlie mint 5000 synthetic Gold tokens and Alice mint 1000 at a price of 1$ with collateral of 600% (6000 UST or ALTE) total supply is 6000 synthetic Gold tokens.
Since Charlie is the genesis account creator of the sponsor contract he owns 100% of 100% of the supply Alice owns 20% of 120%.
2 - Alice sells 500 tokens to Bob. Bob as Alice now own 10% of 120%.
3 - On the next rebase Gold tokens price is 2$ Alice collateral falls to 300% and reaches the liquidation limit.
4 - Disputer calls liquidation.
5 - Alice's total minted tokens are burned creating a Wrapped Remaining Token (WRT). Index total supply fall from 120% to 100%. Total burned supply is now 1000 WRT index is 20%.
6 - Bob previous index was 10% of 120% but since the total supply falls from 120 to 100% Bob own now 0% of 100% all his balance was burned instantly but he won a new token called WRT and now own 10% of 20% this means he owns 50% of the collateral of Alice and can withdraw at any time his UST or ALTE from the Vault.
Disputer liquidation case:
- When the disputer is liquidated his collateral is shared against DAO and Sponsor
Not decided yet but probably a token will be released for governance allowing:
- Project features & evolution
- Set fees (contract creation fees, dispute fees)
DAO receives rewards for voting (Non-voters or wrong voters do not receive rewards.
Fees are collected in ALTE and serve to maintain a high DAO token price in order to prevent DAO corruption.