Treasure Reserve
SDT release in SD Securities is closely related to the Treasure Reserve. Main function of the Treasure Reserve is to balance the overall supply and demand of SDT, ensuring the proper functioning of SD Securities. Treasure Reserve is interconnected with SD Securities through a smart contract, when SD Securities's provision is insufficient, Treasure Reserve comes into play. Simultaneously, when SD Securities has excess SDT, it will be stored in the Treasure Reserve for future provision.
Why Insufficient or Excess of SDT in SD Securities?
During the vesting period of SD Securities, SDT bought will either increase or decrease due to the capital based distribution method.
For example,
Scenario of Mr. A buys SDT at SD Securities for $100
Day 1
$1
$20
20
Day 2
$0.5
$20
40
Day 3
$0.5
$20
40
Day 4
$0.2
$20
100
Day 5
$0.2
$20
100
Total
$20
300
Mr.A is supposed to receive only 100 SDT tokens at $1 price.
In this scenario, Mr.A received 300 SDT tokens in total. Therefore, the Treasure Reserve will have a deficit of 200 SDT.
Scenario of Mr. B buys SDT at SD Securities for $100
Day 1
$1
$20
20
Day 2
$2
$20
10
Day 3
$4
$20
5
Day 4
$5
$20
2
Day 5
$10
$20
2
Total
$100
41
In this scenario, Mr.B received 41 SDT in total. Therefore, the Treasure Reserve will have an additional 59 SDT.
Why does Capital-Based Vesting come into play?
This is to prevent SDT holders from being affected by short-term price fluctuation, securing the capital of SDT buyers during the vesting period. Secondly, it’s also an anti-pump and dump mechanism to avoid price manipulation by whales. Investors and traders can now vest SDT without the hassle of price fluctuations.
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