Minimum Price Fund
The Minimum Price Fund (MPF) is a mechanism implemented on the Cilistia protocol to ensure that the price of the $CIL token remains above a certain threshold. 10% of all revenue generated on the protocol is added to the MPF, this fund is designed to be used as a last resort to prop up the price of CIL.
How it works
The MPF operates through a smart contract that is triggered when the price of $CIL falls below a certain threshold, T. The smart contract is programmed to buy up and burn a certain amount of $CIL, X, in order to increase the price of the $CIL token.
The amount of $CIL released from the MPF, X, is calculated as follows:
- X = MPF * (T - P) / P
- Where:
- MPF = the value of the Minimum Price Fund at the time of trigger
- T = the threshold price for $CIL
- P = the current market price for $CIL
This mechanism is designed to be a last resort to prop up the price of $CIL and ensure the sustainability of the ecosystem. The funds in the MPF are held in a transparent and auditable manner and can only be released under specific conditions.
Summary
The Minimum Price Fund (MPF) is a mechanism implemented on the Cilistia protocol to ensure that the price of the $CIL token remains above a certain threshold, 10% of all revenue generated on the protocol is added to the MPF, the MPF operates through a smart contract that is triggered when the price falls below the set price within the contract. The minimum price will be viewable through the user dashboard.