StableCoin ($FAM)
$FAM is designed to be the cornerstone of the protocol. It’s a stablecoin which is secured and backed by the revenue of the entire protocol and the Treasury.

How does it work?

$FAM stablecoin will be minted by staking USDC at 1:1 ratio.
After minting, the whole USDC amount is being split 75% to 25%. 75% of the amount stays in USDC and 25% of it is used instantly for $GMI token buyback. This way, $FAM is in fact backed by 75% USDC and 25% $GMI token.
Afterwards, all the funds acquired are being sent to the Family contract. That decreases the amount of $GMI token in circulation, thus pushing its price higher.
The idle USDC in the Family contract are going to be used for earning yields in different protocols, flowing back to the Treasury increasing its value steadily and strengthening it as the backbone of the ecosystem.
The $FAM stablecoin will also be used in different WagmiSwap pairs, providing utility and creating an opportunity for a safe yield generation (stablecoin yield farming) in the WagmiDAO protocol.
As the trading volume of $FAM and $GMI on the WagmiSwap grows, the Treasury also grows from trading fees, as well as minting/redeeming fees. This creates a positive feedback loop and raises the floor price of the $GMI token, further increasing the Yield for the Farms and Bonds, thus incentivising more Liquidity Providers to use the protocol.

How minting works:

  1. 1.
    You deposit 1 USDC.
  2. 2.
    The contract mints 1 $FAM and sends it to your wallet.
  3. 3.
    The contract deposits 0.75 USDC into the Family Contract.
  4. 4.
    The contract uses the remaining 0.25 USDC to buy $GMI and holds that in the Family contract.
  5. 5.
    When you want to redeem your collateral, you return 1 $FAM and you receive 1 USDC (excluding redeeming fees).
$FAM is redeemable at any time. There is no minting/burning of $GMI token within the stablecoin contract, removing potential minting vulnerabilities that have been exploited in other protocols.

How does $FAM maintain its peg?

Peg Stability Mechanism 1 - Treasury

$FAM is covered by the Treasury. It’s backed by 75% $USDC and 25% $GMI. If $GMI drops below the floor price, the Treasury starts buying back $GMI, which increases its price and returns $FAM back to peg.

Peg Stability Mechanism 2 - $GMI emissions

For every 24 hours that the price of $FAM is below $1, the protocol adds 0.2 $GMI per Harmony Network block to the Family Contract. These emissions cut once the peg is back to $1.

Peg Stability Mechanism 3 - $FAM LP Support

For every 24 hours that $FAM’ price is under $1, the protocol re-allocates 1% of the total emissions towards the FAM-USDC Farm. The idea behind this is for the Protocol to increase the revenue on that pair and start issuing more rewards for farming it. The increased Yield incentivises more users to provide Liquidity and stake their LP tokens, thus leading to increased demand for the $FAM stablecoin.

Peg Stability Mechanism 4 - WagmiSwap trading fees

For every 24 hours that $FAM’ price is under $1, the protocol re-allocates 5% of the trading fees towards the Family contract until the peg is reached again.
$FAM will provide three additional ways to grow the Treasury:
  1. 1.
    A portion of the idle Treasury funds will be utilized to genereate yields through other protocols. These yields flow back to the Treasury.
  2. 2.
    A 0.5% minting fee will be charged for each $FAM minted. The fee goes back to the Treasury.
  3. 3.
    A 0.8% redemption fee will be charged for each $FAM redeemed. The fee goes back to the Treasury.