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Redeeming AGOBTC & AGOUSD

Redeeming explanation
The process of redeeming implies returning the collateralized tokens AGOUSD / AGOBTC back to the protocol and, in return, receiving back the user's collateral assets and the required amount of share tokens CNBTC / CNUSD, which are required to reach desired equality. This in turn means that with every $1 value, users will receive part of the collateral together with the part of share tokens.
The redeeming formula works based on the Effective Collateral Ratio (ECR) and applies for both algorithmic tokens:
Collateral(WBTC/USDT)Amount=AGOBTC/AGOUSDAmount×ECRCollateral(WBTC/USDT)PriceCollateral(WBTC/USDT) _{Amount}= \cfrac{AGOBTC/AGOUSD_{Amount}×ECR}{Collateral(WBTC/USDT) _{Price}}
Share(CNBTC/CNUSD)Amount=AGOBTC/AGOUSDAmount×(1−ECR)Share(CNBTC/CNUSD)PriceShare (CNBTC/CNUSD)_{Amount}= \cfrac{AGOBTC/AGOUSD_{Amount}×(1-ECR)}{Share (CNBTC/CNUSD)_{Price}}
Now, let's take a look at the following situations, using different input data.

Set - up №1:

  • ECR - 100%
  • USDT price - $1.00

Set - up №2:

  • ECR is equal to 80%
  • WBTC price - $59,000.00
  • CNBTC - $18,000.00
  • The user wants to redeem 1 AGOBTC
WBTCAmount=1AGOBTC×80%⏞ECR59000⏟WBTC price=0.00001356WBTCWBTC_{Amount}= \cfrac{1_{AGOBTC}×\overbrace{80\%}^{\text{ECR}}}{\underbrace{59000}_{\text{WBTC price}}} = 0.00001356_{WBTC}
CNBTCAmount=1AGOBTC×(1−80%⏞ECR)18000⏟CNBTC price=0.00001111CNBTCCNBTC_{Amount}= \cfrac{1_{AGOBTC}×(1-\overbrace{80\%}^{\text{ECR}})}{\underbrace{18000}_{\text{CNBTC price}}} = 0.00001111_{CNBTC}
Summarizing all the above, when the user redeems 1 AGOBTC, he receives 0.00001356 WBTC and 0.00001111 at the WBTC price - $59,000.00 and ECR level of 80%.
Total Value=(0.00001356WBTC×59000)+(0.00001111CNBTC×18000)=0.80004+0.19998=1.00002\text{Total Value} =(0.00001356_{WBTC}×59000) +(0.00001111_{CNBTC}×18000)= 0.80004+0.19998=1.00002
The basic redeeming fee is configured to 0.4% but can be decreased to 0.2% by holding the AGO governance token on the wallet.
Algorithmic functionality - Previous
Minting AGOBTC & AGOUSD
Next - Algorithmic functionality
Rebalancing
Last modified 2yr ago