FAQ

  1. What is Oracle Free Dollar (OFD)?

    Oracle Free Dollar (OFD) is a overcollateralized, decentralised oracle-free, community driven stablecoin

  2. How does OFD differ from traditional stablecoins?

    OFD does not depend on external oracles, making it less susceptible to certain attacks and more versatile with regards to the used collateral. Furthermore it also fully depends on the community that create, challenge and close positions.

  3. What is the role of Oracle Free Dollar Pool Shares (OFDPS)?

    OFDPS are the governance token of the system giving the holder the veto right when new users create positions and OFDPS is also used to distribute the rewards the system creates.OFDPS holders benefit from the earned fees and liquidation profits within the system. When users mint new OFD against collateral or engage in other activities that generate fees or profits, a portion of these rewards is distributed to OFDPS holders. This distribution mechanism incentivizes OFDPS holders to actively participate in governance and contribute to the growth and stability of the system. By holding OFDPS tokens, users can share in the rewards generated by the Oracle Free Dollar ecosystem.

  4. How can one obtain OFDPS?

    Anyone can obtain newly minted OFDPS by providing equity capital to the system.

  5. What are the benefits of holding OFDPS?

    OFDPS holders benefit from earned fees and liquidation profits, but also carry the residual risk of liquidations and they can veto new positions and veto other vetos.

  6. How does the governance process work for OFDPS holders?

    The governance process is veto-based, where 2% of the voting power suffices to veto proposals.

  7. Can OFD be used for making payments in US Dollar currency?

    Yes, OFD can be used to make payments in US Dollar currency. 1 OFD = 1 USD

  8. What are the economic constraints that incentivize the market to push OFD towards parity?

    The system is over-collateralized, with tokens worth at least one OFD backing it.

  9. How is the OFD system over-collateralized?

    For each OFD in circulation, there must be other tokens worth at least one OFD backing it. If a position is undercollateralised anyone can challenge it.

  10. What are the risks associated with liquidations in the OFD system?

    • OFDPS holders carry the residual risk of liquidations, similar to shareholders of a bank.

  11. How can users mint new OFD against collateral?

    Users can mint new OFD against collateral using the built-in borrowing mechanism by either copying a position or creating a new position.

  12. What is the interest rate charged when minting new OFD?

    The OFD system charges a non-refundable interest rate up front when minting new OFD.

  13. How does the OFD system handle positions and collateral assets?

    Positions refer to user accounts holding a positive balance of a collateral asset and a negative balance of OFD that must be repaid.

  14. What is the technical architecture of the OFD system on the Binance Smart Chain?

    The OFD system consists of smart contracts on the Binance Smart Chain, with token contracts as a foundation. The codebase is public and audited.

  15. How can users propose new contracts within the OFD system?

    Anyone can propose new contracts, and once they pass the governance process, they can start minting and burning OFD.

  16. What are the key features of the Oracle Free Dollar Pool Shares (OFDPS)?

    • OFDPS holders have governance power and benefit from fees and liquidation profits.

  17. How does the OFD system ensure stability and governance?

    OFDPS holders have incentives to grow the system and ensure its stability through governance.

  18. What are the use cases of OFD and OFDPS?

    OFD primarily serves use cases like borrowing, with potential for further tools and services for other use cases.

  19. How can users participate in the governance of the OFD system?

    Users can participate in governance by proposing new collateral types or methods to bring OFD into circulation.

  20. Why is it beneficial to be early in the OFD system?

    Being early in the OFD system can be advantageous as early users may have access to better interest rates and opportunities for higher returns. This is because early users may benefit from lower competition and higher potential for growth in the system.

  21. What is interest arbitrage in the OFD system?

    Interest arbitrage in the OFD system refers to the strategy of minting additional OFD at a lower interest rate and using it to buy pool shares that yield a higher return. This strategy can be profitable when the reserve is below a certain threshold, allowing users to maximize their returns.

  22. How does the market cap of OFD and FPS impact investment strategies?

    The market cap of OFD and FPS can provide insights into market sentiment and expectations. If the FPS market cap is higher than the OFD market cap, it may indicate market participants are bullish on the system's growth, influencing investment decisions.

  23. What is the significance of proportional capital valuation in the OFD system?

    Proportional capital valuation in the OFD system determines the market price of pool shares based on the system's equity capital. Understanding this valuation mechanism is crucial for making informed investment decisions and maximizing returns.

  24. How can users create additional pool shares in the OFD system?

    Users can create additional pool shares in the OFD system by depositing reserve capital at any time. This process allows users to increase their stake in the system and potentially benefit from future growth and seignorage gains.

  25. What role does stability play in investment strategies within the OFD system?

    Stability is essential in the OFD system, especially for users holding OFD for transactional purposes. Maintaining stability ensures trust and confidence in the system, impacting investment decisions and overall market dynamics.

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