STP 8 — Restorative Rebase
This STP proposes Restorative Rebase, an improved way for τBitcoin to conduct deflationary rebase (e.g., bringing the relative price of τBitcoin compared to Bitcoin back to 1). If STP 8 is passed, Restorative Rebase will be activated for τBitcoin on or by April 30, 2021 at 08:00pm (SGT).
As τBitcoin continues its initial liquidity event, it has demonstrated strong price resilience and earned tremendous market recognition. No deflationary rebase has been triggered because of the built-in open market purchases and our community’s trust in τBitcoin’s price pegging mechanism. This shows that τBitcoin, supported by miners representing 12% of Bitcoin’s global hashrate, is the most successful synthetic Bitcoin on the market.
The team has since received advice from experts in algorithmic assets and our community on how τBitcoin’s deflationary rebase process could be improved. Namely, the current deflationary rebase process described by the τ whitepaper proportionately reduces the balances of all τBitcoin addresses during a deflationary epoch. This process could discourage some market participants from holding τBitcoin, for the universal rebase could be viewed as unfairly punishing faithful owners not responsible for price deviation.
The team now proposes Restorative Rebase as an improvement. Restorative Rebase intends to (i) not only protect but also reward faithful holders of τBitcoins during deflationary epochs, (ii) discourage, with high precision, behaviors that aggravate price discount, and (iii) create a stronger force to restore the relative price of τBitcoin compared to Bitcoin back to 1.
Restorative Rebase consists of the following components:
- Restorative Contribution: During an epoch (each epoch is about 24 hours) where τBitcoin TWAP is below 0.9 (relative to Bitcoin) such that deflation becomes necessary, all outgoing transfers of τBitcoins from any addresses (other than addresses whitelisted for being exchange consolidation wallets or τBitcoin re-investment vaults, etc.) must pay a Restorative Contribution in an amount equal to 30% of the transferred amount. For example, a user must hold 1.3 τBitcoin in a sender address in order to successfully initiate a transfer-out with a specified amount of 1.0 τBitcoin. The Restorative Contribution is not deducted from the amount that a recipient will receive; rather, the transfer will fail if the sender address does not contain sufficient τBitcoin to cover the contribution. When the transfer goes through, the sender address will be deducted 1.3 τBitcoin, and the recipient will receive 1.0 τBitcoin.
- Restorative Burn: Of the collected Restorative Contributions, 50% (15% of the transfer amount) will be burned immediately to permanently take them out of circulation. Again, unlike the current deflationary rebase process, Restorative Burn is transfer specific and does not impact holders of τBitcoins who have no outgoing transfers of τBitcoins during deflationary epochs.
- Ecosystem Rewards: The remaining 50% (15% of the transfer amount) of the collected Restorative Contributions will be allocated to be mined by the BTCST-τBitcoin vault over a period of 5 epochs, with 10% released during each epoch. Note that only addresses that have no outgoing transfers of τBitcoin during an epoch is eligible to mine this allocation of τBitcoin rewards.
The process for τBitcoin’s inflationary rebase (e.g., bringing the relative price of τBitcoin compared to Bitcoin down to 1) remains unchanged.
Voting time: 00:00 04/23/2021–20:00 04/26/2021 SGT