C - Ratio
How does collateralization work
Since Argano offers 2 algorithmic, dollar and Bitcoin pegged tokens - AGOUSD & AGOBTC respectively, our team is going to use Target Collateral Ratio and Effective Collateral Ratio in order to stabilize the asset price and regulate their circulation according to the market supply and demand:
Target Collateral Ratio
TCRrepresents the C - Ratio to reach the desired asset price.
TCRis used in the asset minting calculation formula, both for AGOUSD & AGOBTC tokens.
TCRwill be automatically calculated and established one time per hour, with the possible step of 0.25%. The maximum ratio couldn't be reached more than 6% per 24 hours.
Effective Collateral Ratio
ECRis equal to the ratio between the total value of collateral assets and the total value of algorithmic tokens in circulation.
ECRis used in the asset redeeming calculation formula, both for AGOUSD & AGOBTC tokens.
- When the user wants to redeem his AGOUSD or AGOBTC tokens, he can be sure that for every number of both algorithmic tokens, he will receive the required number of collateral tokens and share tokens to achieve an equivalent value in dollar terms.