Role of USDR
Last updated
Last updated
Array has made significant innovations in its tokenomics, deviating from the traditional governance token approach and providing more practical value to the protocol's dual tokens - ARA and USDR. ARA is controlled by ArrayGo, an AI algorithm of smart contracts, which ensures its stable growth.
USDR is the only consumption token in the Array ecosystem, which is anchored 1:4 with the ARA currency standard, that is, users can mint 1 USDR with 4 ARA. Meanwhile, if one ARA is worth 1U, four ARAs can mint 1U worth of USDR tokens, resulting in an over-collateralization of 400%, and the over-collateralization ensures the security of USDR.
In addition, USDR will be continuously consumed in the Array ecosystem, and the AI algorithm smart contract will continue to adjust the ARA to regulate the consumption speed of USDR. ARA and USDR have jointly established a growing and stable economic system in the Array ecosystem.
The traditional method of implementing a bounding curve can be performed through a smart contract that governs the issuance and trading of a token. This technique maintains the token's value within a predictable range for investors and traders. An initial coin offering (ICO) is an example of when a bounding curve is used to set the token's price range. This establishes a stable price range, which can provide investment security for token purchasers. However, this approach is centralized and can be controlled by humans.
To improve upon the traditional bounding curve approach, Array has developed an AI-powered algorithm called Array-Go, which is based on the bounding curve smart contract. Array-Go provides all the benefits of the bounding curve but with significant enhancements. Array-Go is entirely autonomous and not controlled by any individual or institution, relying instead on one hundred percent market actions. For example, when an $ARA whale plans to sell a large amount of $ARA, Array-Go will intelligently sell tokens in waves based on what it has learned from previous market actions and its prediction for future market trends.
Cryptocurrency markets are highly volatile due to unpredictable market trends, but Array-Go's ability to learn, observe, and predict market trends minimizes risks. Array-Go can be compared to an investment manager for token holders and sellers, making it a pioneering practical solution for decentralized finance.