Anyway, as promised, let me continue with the explanation about this proposal.
I have now added a diagram to the Stability section so I am sharing the entire section here cause it’s extremely important to understand how the stablecoin holds the peg, and how we do not have one level of reserves, but three. There is a backup for a backup for a backup, technically speaking.
The following table describes the precautions the system takes in order to prevent a situation like a death spiral while providing enough buffer reserves (and emergency buffer reserves) to safeguard against any unforeseen market fluctuations or abnormalities:
We have provided for the following 3 Levels of Reserves in the diagram above:
- 1:1 $INRT to $BTC+$ETH Reserves
- 20% Buffer Reserves (Above 1:1 Reserves)
- 50% (Above 20% Buffer Reserves) Emergency $LUNC Reserves
Note:- The table above is the TL;DR version of this proposal/plan since it describes in brief how the peg to 1 Indian Rupee is kept at exactly 1 Indian Rupee, and how $LUNC is burnt as a result of the functioning of this system/plan.