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PSD - Psanctuary Dollar Stablecoin

💵 Overview​

PSD (Psanctuary Dollar) is the stablecoin of the Ethereal Offering ecosystem, designed to maintain a 1:1 peg with the US Dollar. It provides price stability for trading, ceremonies, and treasury management.

PropertyValue
SymbolPSD
TypeERC-20
SupplyElastic (mints/burns to maintain peg)
Decimals18
Peg1 PSD = $1 USD
Primary UseStable trading pair, treasury reserve

🎯 Why a Stablecoin?​

The Volatility Problem​

Cryptocurrencies are notoriously volatile:

  • ETH can swing 10-20% in a day
  • PSILO price depends on market sentiment
  • ETHO is deflationary and unpredictable
  • MDAO value fluctuates with governance activity

This creates problems:

  • Hard to price offerings consistently
  • Difficult to budget treasury allocations
  • Risky for users who want stability
  • Confusing for newcomers

The PSD Solution​

PSD provides price stability:

  • Always worth $1 USD
  • Predictable value for planning
  • Safe haven during volatility
  • Easy mental accounting

Use cases:

  • Trading Pair - ETHO/PSD pool (stable pricing)
  • Treasury Reserve - Store value without volatility
  • Offering Pricing - "Burn $100 worth of ETHO"
  • Payments - Pay for services in stable currency

🏦 Peg Mechanism​

How PSD Maintains $1 Peg​

PSD uses a hybrid collateralization model:

1. Over-Collateralization (Primary)​

Users deposit collateral to mint PSD:

// Deposit ETH to mint PSD
function mintPSD(uint256 ethAmount) external payable {
    require(msg.value == ethAmount, "ETH mismatch");
    
    // Require 150% collateralization
    uint256 psdAmount = (ethAmount * ethPrice) / 1.5;
    
    // Mint PSD to user
    psd.mint(msg.sender, psdAmount);
    
    // Lock ETH as collateral
    collateral[msg.sender] += ethAmount;
}

Example:

  • Deposit 1 ETH ($2,000)
  • Receive 1,333 PSD ($1,333)
  • Collateralization ratio: 150%

Why 150%?

  • Protects against ETH price drops
  • Maintains peg during volatility
  • Provides liquidation buffer

2. Algorithmic Stabilization (Secondary)​

If PSD deviates from $1, the protocol adjusts:

If PSD > $1.01 (too expensive):

  • Reduce collateral requirements
  • Incentivize minting (create more PSD)
  • Increase supply to lower price

If PSD < $0.99 (too cheap):

  • Increase collateral requirements
  • Incentivize burning (reduce PSD supply)
  • Decrease supply to raise price

3. Treasury Backing (Tertiary)​

The DAO treasury holds reserves:

  • 20% of treasury in USDC/DAI
  • Can buy PSD if price drops
  • Can sell PSD if price rises
  • Acts as buyer/seller of last resort

Liquidation Mechanism​

If collateral value drops too low:

// Liquidate undercollateralized position
function liquidate(address user) external {
    uint256 collateralValue = getCollateralValue(user);
    uint256 debtValue = psdDebt[user];
    
    // If collateral < 120% of debt, liquidate
    if (collateralValue < debtValue * 1.2) {
        // Liquidator pays off debt
        psd.burnFrom(msg.sender, debtValue);
        
        // Liquidator receives collateral + 5% bonus
        uint256 liquidationBonus = collateralValue * 0.05;
        payable(msg.sender).transfer(collateralValue + liquidationBonus);
        
        // Clear user's position
        delete collateral[user];
        delete psdDebt[user];
    }
}

Liquidation Example:

  • User deposited 1 ETH ($2,000), minted 1,333 PSD
  • ETH drops to $1,500
  • Collateral ratio: 112.5% (below 120% threshold)
  • Liquidator pays 1,333 PSD, receives 1 ETH + 5% bonus
  • User loses collateral but debt is cleared

💰 How to Get PSD​

1. Mint with Collateral​

Deposit ETH or other approved assets:

  1. Go to "Mint PSD" page
  2. Choose collateral type (ETH, WBTC, etc.)
  3. Enter amount to deposit
  4. See how much PSD you'll receive
  5. Confirm transaction
  6. Receive PSD in our wallet

Fees:

  • Minting fee: 0.5%
  • Redemption fee: 0.5%
  • Fees go to treasury

2. Swap on AMM​

Trade other tokens for PSD:

  • ETHO/PSD Pool - Primary pair
  • DM/PSD Pool - Daily rewards to stable
  • MDAO/PSD Pool - Governance to stable

Swap fees: 0.3% (80% to treasury, 20% to LPs)

3. Earn as Rewards​

Receive PSD for participation:

  • Liquidity Provision - Earn PSD for providing liquidity
  • Staking Rewards - Some staking pools pay in PSD
  • DAO Grants - Treasury allocations in PSD
  • Bounties - Bug bounties paid in PSD

4. Purchase Directly​

Buy PSD with fiat:

  • Credit Card - Via Moonpay/Transak integration
  • Bank Transfer - Via Circle/Coinbase
  • P2P - Buy from other users

🔄 Use Cases​

1. Stable Trading Pair​

The ETHO/PSD pool is the primary trading pair:

Benefits:

  • Price ETHO in dollars (easier to understand)
  • Less impermanent loss than ETHO/ETH
  • Stable liquidity for large trades
  • Predictable swap outcomes

Example:

  • ETHO price: $0.05
  • Want to buy $100 worth
  • Need: 2,000 ETHO
  • Swap 100 PSD → 2,000 ETHO
  • Simple!

2. Treasury Reserve​

The DAO holds PSD for stability:

  • Budget Allocations - Pay developers in PSD
  • Grant Programs - Fund projects in PSD
  • Emergency Fund - Stable reserve for crises
  • Operational Expenses - Servers, tools, etc.

Why not hold USD directly?

  • PSD is on-chain (programmable)
  • No bank account needed
  • Instant transfers
  • Transparent on blockchain

3. Offering Pricing​

Price ceremonial burns in dollars:

  • "Burn $10 worth of ETHO"
  • "Burn $100 worth of ETHO"
  • "Burn $1,000 worth of ETHO"

How it works:

  1. User wants to burn $100 worth
  2. Check ETHO/PSD price (e.g., $0.05)
  3. Calculate: $100 / $0.05 = 2,000 ETHO
  4. User burns 2,000 ETHO
  5. Consistent dollar value regardless of ETHO price

4. Payments & Salaries​

Pay contributors in stable currency:

  • Developers - $5,000/month in PSD
  • Moderators - $500/month in PSD
  • Content Creators - $100/article in PSD
  • Service Providers - Invoices in PSD

Benefits:

  • Predictable income
  • No volatility risk
  • Easy accounting
  • Professional standard

📊 Collateral Types​

Accepted Collateral​

AssetCollateral RatioLiquidation Threshold
ETH150%120%
WBTC150%120%
USDC105%102%
DAI105%102%
PSILO200%150%

Why different ratios?

  • More volatile assets need higher collateral
  • Stablecoins need less (already stable)
  • PSILO is project token (higher risk)

Multi-Collateral Positions​

we can use multiple assets:

Example:

  • Deposit 0.5 ETH ($1,000)
  • Deposit 0.01 WBTC ($500)
  • Total collateral: $1,500
  • Can mint: $1,000 PSD (150% ratio)

Benefits:

  • Diversify collateral risk
  • Use what you have
  • Optimize capital efficiency

🛡️ Risk Management​

Risks​

⚠️ Important Risks:

  1. Collateral Volatility - ETH price can drop, triggering liquidation
  2. Smart Contract Risk - Bugs could cause loss of funds
  3. Peg Risk - PSD could lose $1 peg temporarily
  4. Liquidation Risk - Lose collateral if ratio drops too low
  5. Oracle Risk - Price feed manipulation

Mitigation Strategies​

✅ How we mitigate:

  1. Over-Collateralization - 150% buffer protects against drops
  2. Audited Contracts - Professional security audits
  3. Multiple Peg Mechanisms - Collateral + algorithmic + treasury
  4. Liquidation Warnings - Email/Discord alerts before liquidation
  5. Chainlink Oracles - Decentralized, manipulation-resistant price feeds

Best Practices​

✅ User best practices:

  • Monitor Collateral Ratio - Check daily
  • Maintain Buffer - Keep ratio above 200%
  • Set Alerts - Get notified if ratio drops
  • Diversify Collateral - Don't use only one asset
  • Understand Liquidation - Know the risks

📈 PSD Economics​

Supply Dynamics​

PSD supply is elastic (changes based on demand):

Total Supply = Sum of all minted PSD
Circulating Supply = Total Supply - Burned PSD

Supply increases when:

  • Users mint more PSD (deposit collateral)
  • Demand for PSD is high
  • PSD price > $1 (arbitrage opportunity)

Supply decreases when:

  • Users burn PSD (redeem collateral)
  • Demand for PSD is low
  • PSD price < $1 (arbitrage opportunity)

Arbitrage Mechanism​

Keeps PSD at $1 through profit incentive:

If PSD = $1.02:

  1. Arbitrageur deposits $100 ETH
  2. Mints 100 PSD (costs $100)
  3. Sells 100 PSD for $102 (profit $2)
  4. Repeat until PSD = $1

If PSD = $0.98:

  1. Arbitrageur buys 100 PSD for $98
  2. Redeems for $100 worth of ETH
  3. Profit $2
  4. Repeat until PSD = $1

This keeps PSD stable automatically!

🔗 Integration​

For Developers​

Integrate PSD into our dApp:

// Get PSD contract
const psd = new ethers.Contract(PSD_ADDRESS, PSD_ABI, signer);

// Check balance
const balance = await psd.balanceOf(userAddress);

// Transfer PSD
await psd.transfer(recipientAddress, amount);

// Approve spending
await psd.approve(spenderAddress, amount);

// Mint PSD with ETH
await psdMinter.mintWithETH({ value: ethAmount });

// Redeem PSD for ETH
await psdMinter.redeemForETH(psdAmount);

For Merchants​

Accept PSD as payment:

  1. Generate Payment Address - Unique address per invoice
  2. Display QR Code - Customer scans and pays
  3. Monitor Blockchain - Watch for payment confirmation
  4. Deliver Product - Once payment confirmed

Benefits:

  • No chargebacks
  • Instant settlement
  • Low fees (0.5%)
  • Global reach

📊 Metrics & Analytics​

Key Metrics​

Supply Metrics:

  • Total Supply: [Check Contract]
  • Circulating Supply: [Total - Burned]
  • Collateral Value: [Sum of all collateral]
  • Collateralization Ratio: [Collateral / Supply]

Peg Metrics:

  • Current Price: [Check AMM]
  • 24h High/Low: [Price range]
  • Deviation from $1: [Price - $1]
  • Peg Stability: [% of time within $0.99-$1.01]

Activity Metrics:

  • Daily Mints: [New PSD created]
  • Daily Burns: [PSD redeemed]
  • Net Supply Change: [Mints - Burns]
  • Liquidations: [Number and value]

🔗 Resources​

"Stability is not stagnation—it's the foundation for growth. PSD provides the solid ground on which our ecosystem flourishes." 💵✨