$1/USDC) at a collateral ratio of 1.00
200 FRAXare minted in this scenario. Notice how the entire value of FRAX is in dollar value of the collateral when the ratio is at
100%. Any amount of FXS attempting to be burned to mint FRAX is returned to the user because the second part of the equation cancels to
0regardless of the value of
150 FRAXare minted in this scenario.
120 FRAXare backed by the value of USDC as collateral while the remaining
30 FRAXare not backed by anything. Instead, FXS is burned and removed from circulation proportional to the value of minted algorithmic FRAX.
437.78 FRAXare minted in this scenario. Proportionally, half of the newly minted FRAX are backed by the value of USDC as collateral while the remaining 50% of FRAX are not backed by anything.
62.54 FXSis burned and removed from circulation, half the value of the newly minted FRAX. Notice that the price of the collateral affects how many FRAX can be minted – FRAX is pegged to 1 USD, not 1 unit of USDC.
$170of value to the redeemer in
110.5 USDCfrom the collateral pool and
15.867 of newly minted FXStokens at the current FXS market price.
2block delay parameter (adjustable by governance) on withdrawing redeemed collateral to protect against flash loans.