The default exchange price for OURO is designed to only increase in order to create an inflation-proof store of value. As previously mentioned, this appreciation is supported by excess collateral value in the system.
The system will determine whether there is more collateral than needed for a 1-1 peg between the value of the issued OURO tokens and that of the assets stored in the pool. If yes, then a change in the OURO Default Exchange Price would be triggered.
There is a 3% limit to how much the OURO Default Exchange Price can increase per month. Once that limit is reached, all excess collateral will be used solely for OGS token burns and the formation of Insurance Fund.
For instance, the pool currently contains 100,000,000 USD worth of assets. The next day, assets in the pool appreciated in value, and we have 150,000,000 USD worth of assets, but only 100,000,000 USD worth of OURO circulating. The system at this point has 50,000,000 USD worth of excess assets. Up to 30% of it, or 15,000,000 USD worth of assets, can be used for OURO appreciation.
However, since there is a 3% limit on how much the OURO Default Exchange Price can increase per month, only [100,000,000*0.03 = 3,000,000] USD worth of excess assets can be utilized. This 3,000,000 USD worth of assets will remain in the Reserve Pool, while the remaining [50,000,000-3,000,000=47,000,000] USD worth of assets will be used for OGS token burns (50% of it, or 23,500,000 USD)and the formation of Insurance Fund (50% of it, or 23,500,000 USD).