# $MORE + $sMORE ## $MORE Stack’s `$MORE` token is a non-algorithmic, collateral-backed asset soft-pegged to the dollar. For every $1 USD of `$MORE` should have more than $1 USD of collateral backing. Stack considers `$MORE` to be worth $1 however at times it may not trade at this value. In these instances, Stack has several options at its disposal to regain the $1 USD peg. `$MORE` was developed using the OpenZeppelin [ERC20 canonical](https://docs.openzeppelin.com/contracts/4.x/api/token/erc20#IERC20) implementation. ### `$MORE` Peg Stability `$MORE` is soft-pegged to $1 USD and it's important that it trades consistently at a $1 value. The peg stability mechanics rely on two primary tools: Interest Rates and Arbitrage. #### Interest Rates Stack sets the interest rate for the protocol. As discussed on the [next page](/tokenomics/fees.md#determining-the-borrow-apr), these rates are an important tool in managing the circulating supply of `$MORE`. To encourage economic activity, we prefer **low rates** for borrowing on the protocol. * Low rates encourage `$MORE` borrowing and `$MORE` in circulation * With low rates there is less demand to stake, keeping `$MORE` in circulation However, if `$MORE` is being dumped and begins to depeg, we can go to **high rates.** * At higher rates, borrowers are encouraged to close out positions to avoid incremental fees/costs * High rates also pass-through to stakers, encouraging staking, removing `$MORE` from circulation #### Arbitrage Arbitrage is another way peg stability is incentivized through the activity of market participants. * If `$MORE` were to trade below $1 USD, it would be advantageous for debt holders to purchase `$MORE` at a discount and use these "cheap dollars" to pay back outstanding debt. Buying discounted `$MORE` will eventually raise the price back to $1. * If `$MORE` were to trade above $1 USD, users holding Stack collateral could open a new position and sell the borrowed `$MORE,` capturing that value between the issuance and sales price. Selling `$MORE` from this behavior will lower the price back to $1. * As the re.al ecosystem expands `$MORE` may trade at different prices in different markets. Users can buy and sell from these different markets to close the spread and move prices back to $1 USD everywhere. Its quite common for bots to monitor pools and quickly capitalize on these opportunities, with the benefit that depegs are often quickly corrected. #### Emergency Rate Hikes During a Depeg CDP economics incentivize borrowers to buyback `$MORE` and repay debt in the event of a depeg. However, these market dynamics may lag the speed that fear and panic selling permeate an ecosystem and cause irreparable harm. The plan below seeks to solve this problem while incentivizing both borrowers and liquidity providers (stakers). In the event of a serious depeg, where the price of `$MORE` falls below $0.95, the protocol will take emergency action, leveraging interest rate hikes to force the closure of leveraged positions and incentivize additional market participation. A 100% interest rate will be implemented when `$MORE` falls below the $0.95 depeg threshold. The rate will be lifted by 100% every 24 hours until the peg is restored to $0.995. At $0.995 interest hikes will pause and remain at the elevated state until $0.999 is achieved. At that time, rates will taper off by 100% every 24 hours until the base rate is restored. At the same time, the majority of vaults will have their debt ceilings set to zero, there should be no opportunity to open new positions until the ecosystem stabilizes. Once peg is restored, Stack will begin to slowly open capacity alongside `$MORE` demand. CDP economics give the majority of the benefits of a depeg to borrowers, leaving CDP liquidity providers “holding the bag.” Borrowers are able to reduce debt at a discount while LPs and other market participants are forced to wait the situation out. Our solution gives ample benefit to both groups, as `$sMORE` stakers benefit from the increased staking yields returned from the elevated rates, ensuring all market participants are incentivized to participate in `$MORE`'s repeg. Rate hikes and other protocol adjustments will be processed manually. Any depeg should be looked at on a case-by-case basis. The guidelines above may not be the optimal solution in each instance and can be adjusted based on the specific needs required to stabilize the protocol during a period of crisis. ## $sMORE `$sMORE` is the staked version of `$MORE`, shares in a vault of `$MORE` that accrues additional fees from protocol operations. `$sMORE` is an [ERC-4626](https://ethereum.org/en/developers/docs/standards/tokens/erc-4626/), a standard used to optimize and unify the technical parameters of yield-bearing vaults that represent shares of a single underlying ERC-20 token. When users deposit `$MORE` tokens into the `$sMORE` vault (using the ERC-4626 standard), they receive `$sMORE` tokens in return, representing their share of the vault. As the value of the vault goes up i.e. Stack platform fees accrue to stakers, the value of `$sMORE` also goes up. `$MORE` - Denoted in amount `$sMORE` - Denoted in shares Upon `$MORE` deposit, `$sMORE` shares received: `shares = deposit amount * $sMORE current supply / balance of $MORE in vault` When staked, the fees that accrue to `$sMORE` are sent back to stakers each day as [more `$sMORE` in their wallet](#user-content-fn-1)[^1]. [^1]: wrong --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.stackmore.xyz/tokenomics/usdmore-+-usdsmore.md?ask= ``` The question should be specific, self-contained, and written in natural language. 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