Our stablecoin: taoUSD

taoUSD is the first over-collateralized stablecoin backed by wTAO

taoUSD is engineered to be a low-volatility stablecoin, soft-pegged to the US dollar. The protocol incorporates several mechanisms to ensure minimal price deviation (between $0.995 and $1.005):

• Debt Issuance and Repayment: If taoUSD's price falls below parity by more than the issuance fee, users are incentivized to buy taoUSD to repay their interest-free debt. Conversely, if the price exceeds parity by more than the issuance fee, users are incentivized to borrow more to purchase assets at a discount.

• Liquidity incentives: TaoBank partners with other protocols to provide incentives for taoUSD/USDC liquidity on Uniswap.

• Redemptions: Redemptions are restricted to protocol-owned whitelisted addresses, preventing fund exit from the protocol. Profits from redemptions are used to increase liquidity for taoUSD and TBANK (see below for the TBANK token).

• Liquidations: In the event of liquidations, vaults are auctioned via a Dutch auction, where bidders can buy collateral assets at a discount with taoUSD. If no bids are received, the protocol executes the liquidation.