What is Ouro
Creating a stable, inflation-proof store of value.
Last updated
Creating a stable, inflation-proof store of value.
Last updated
The project aims to derive fiat inflations manifested in the growth of the value of crypto assets and migrates them onto OURO, making it an inflation-proof store of value.
A user deposits 1,000 USD worth of assets and will receive 1,000 USD worth of OURO. It creates a 1-1 collateralization/peg.
The platform, or more specifically the Reserve Pool, now contains 1,000 USD worth of assets.
When assets in the pool increase in value, a majority of this excess collateral would be used to conduct OGS (Ouro Governance Share) token burns and also to form the Insurance Fund. The rest of the excess collateral would be stored in the Reserve Pool to support the appreciation of OURO. The Default Exchange Price of OURO can increase at most 3% per month.
When assets in the pool decrease in value, and the Reserve Pool does not have enough collateral to keep a 1-1 peg for OURO, the system would mint new OGS tokens (at times together with the help of the Insurance Fund) to buyback enough collateral from secondary markets for the Reserve Pool.
Inflation-proof as a service can never be achieved by centralized stablecoins due to their inherit way of functioning. It can also be difficult for any decentralized stablecoins to achieve this with a Collateralized Debt Position (CDP) based structure (such as the likes of MakerDAO), which is the most commonly used way for the creation of a stablecoin.
With the ability to hedge against fiat inflation, OURO has also made itself the best stable asset for AMM liquidity provision, as the appreciation of OURO can also in some sense act as a hedge to Impermanent Loss.
It can be said that the growth of cryptocurrencies is partly contributed by fiat inflation, and many do consider holding Bitcoin as a way to escape from the depreciating dollar.
But Bitcoin is not for everyone. Due to the macroeconomic environment as well as the fact that Bitcoin adoption is still in its early stage, Bitcoin’s price exhibits great volatility. For many, holding Bitcoin does create a lot of mental stress in its ups and downs, and using Bitcoin to hedge against fiat inflations does require some extraordinarily strong hands.
By holding OURO, on the other hand, users do not have to worry about the downside risks, as they are absorbed fully by the OGS token as well as the Insurance Fund.
Although OURO can not provide 3-digit annual returns as Bitcoin or other mainstream crypto assets can do, and can at most provide a ~40% (in practice we'd expect a lower return when the platform has a large number of users) return in appreciation, it does offer a unique feature as there can be no risks in losing money for a long term holder.
The team has designed the OURO token in a way that it migrates just enough capital from the Reserve Pool (when allowed) to be able to hedge USD inflation for most years.
