Monetary Policies

​Luxor features policy constants that allow us to optimize the system.

Bonds

Every time a user Mints LUX on Luxor, they are actually purchasing a bond.

These "Bonds" have different parameters, including the BCV, which allows us to scale the rate at which bond premiums increase. A higher BCV means a lower discount for bonders and more protocol profit. A lower BCV means a higher discount for bonders and less protocol profit.

The vesting term determines how long it takes for bonds to become fully redeemable. A longer term means lower inflation and lower bond demand.

Sales

The DCV allows us to scale protocol buy pressure up or down. A higher DCV means more buy pressure and higher deflation. A lower DCV means less buy pressure and a weaker floor.

Treasury

Profit allocations are the only treasury variable. This allows us to choose who receives profits from the protocol.

Staking

There are no variables in the staking contract. LUX and LUMens are always redeemable 1:1, and profits are always distributed equally through rebase.

Buy-Back Policy

In the interest of maintaining our backing (floor) price, we are instituting a policy that enables the treasury to buyback LUX off the market. This policy will take place any time the market price falls within a non-specific threshold. This threshold is intentionally unannounced in an attempt to prevent bad actors from manipulating the process to their benefit. Additionally, the exact division of the policy allocation of LUX buybacks are reflected in the resources section, under Buyback Allocation and updated on occasion. As is the case with the Bond Limits, all updates will be immediately documented. Please Note: we are no longer limiting bonds, but instead enforcing a new rule (Minimum Price Requirement) as explained below.

Minimum Price Requirement

All bonds are now subject to a lower bond, such that the discount of any given bond follows closely with the backing price of LUX. The motivation for this decision is due to the impact of steep-discounts that were provided on Luxor Bonds, in the past. Long gone are the days of 50%+ discounts, thanks to this new policy.