The redeem enables users to convert CoUSD to COFFIN + FTM ( or DAI or other collateral).
COFFIN Finance V1 faced inflation problem by redeem loop. To prevent the problem, v2 redeem has some restrictions as inflation protection.
It may work or not work for keeping CoUSD peg. Note that it’s still challenging mechanism.
V2 Redeem Restrictions/Parameters
V2 Minting has some restrictions by below parameters.
Users can suggest updating parameters on snapshot voting.
There will be a threshold for Redeem.
In case the CoUSD price is above the threshold, users cannot redeem.
By default, the threshold will be ($0.993333).
Because, if the marketing price is above 0.993333, there is no benefit for uses to redeem rather than swap on market because of redemption fee.
The threshold mechanism is similar with FRAX finance.
One time Redeem Limitation
There is a limitation for one time CoUSD Redemption.
By default, it is 99 CoUSD.
Redeem Limitation and Redeem Limitation within a period .
There is a limitation for amount of CoUSD Redemption within specific period.
It's not only by your address. It's related to total addresses.
By default, the period is 28,800 seconds.
And the limitation is 1,000 CoUSD.
Unclaimed COFFIN limitation by each address.
Users cannot redeem if unclaimed amount COFFIN is exceeded the parameter.
By default, it is 500 COFFIN.
User can claim after the delay.
By default, it is 7 days.
Fixed Redemption Collateral Ratio Flag and Fixed Redemption Collateral Ratio
By default, this flag is false.
If the flag true, the protocol enables users to redeem by fixed redemption collateral ratio.
When the flag is false, the protocol enables users to redeem by redemption collateral ratio.
The redemption collateral ratio is calculated by current collateral ratio and some parameters.
Redemption Collateral Ratio Safety
By default, it is 2%.
The redemption collateral ratio is calculated by current collateral ratio and safety.
Current collateral ratio is always below 100% even though actual collateral ratio is more than 100%.
The redemption collateral ratio is current collateral ratio minus the safety.
By default, it is 0.4%
Extra Redemption Fee
By default, it is 0.3%
Extra Redemption Fee Threshold
By default, $0.950000
We highly recommend you to Do Your Own Research and never use funds within the Coffin Finance that you cannot afford to lose. You won’t be compensated for any losses. All interactions with the associated smart contracts on Fantom Opera Network and software on Coffin Finance are at your own risk.