Insurance Fund and Stack AMO

Insurance Fund

As noted in liquidations, 50% of the liquidation fee is kept by the protocol and distributed to the insurance fund.

The insurance fund is a 4/5 multisig operated by the team. It's role is to serve as a rainy day fund that can bail out the protocol in the event of a liquidity crisis.

During a significant $MORE depegging, these assets will be used to buy and burn after the move. This would be a highly profitable trade for the insurance fund, while also getting greater $MORE protection per dollar invested in the insurance fund.

Stack AMO

The Stack AMO “Algorithmic Market Operations Controller” module is a set of contracts that implement various monetary policies intended to maintain more $MORE price stability. This AMO is allowed to conduct open market operations in an algorithmic manner.

The Stack AMO utilizes a multi-pronged approach to support $MORE price stability.

1. Sells if $MORE price exceeds $1.01 For CL (e.g. Pearl), this involves pre-minting a large position, and offering it from 1.01 to 1.0101 (depending on tick spacing). This makes it much harder for buyers to get too ripped-off if they have a large buy. For stableswaps the AMO mints and sell as needed to keep the price down.

2. Makes tight markets

   The AMO provides liquidity between $0.99 and $1.01. Expecting $MORE to most commonly trade in this range, this strategy should provide ample liquidity in the optimal trading range.

3. Makes wide markets This helps in case of a tail event. The AMO deploys $MORE liquidity into the full range, just like a constant product pool, ensuring the market for $MORE can never completely break in the case of a major depeg. In addition, this gives us dry power in the case of a depeg, pulling liquidity and buying back using remaining stablecoins.