How Issuaa Remains Solvent At All Times

Staying solvent no matter what is a major reason we think Issuaa is worth participating in. Let’s explore this with a specific example of the DJIA-Index Issuaa asset.

A user mints DOW tokens for a total amount of 60k USD at the 30k USD Dow Jones Index price mark. Considering the upper limit for the ISSUAA DOW asset is 60k, the user will receive 1 long DOW and 1 short DOW token. Thus, each of the two assets is worth 30k USD (Value of the short: 60k USD — 30k USD).

If the DOW Jones index rises to 35k USD, the value of the long token will rise by 5k USD to 35k USD, while the value of the short DOW asset will drop from 30k to 25k USD (60k USD — 35k USD). Still, the two tokens will have a combined value of 60k USD.

The user can redeem their collateral of 60k at any time when paying back 1 long and 1 short token. An arbitrage opportunity exists directly on the chain if the market prices of the two assets do not add up to 60k. If the upper limit is breached and accepted by the consensus of IPT holders’ governance vote, the short token will become worthless, and the long token can be redeemed for 60k USD.

After expiry, consensus will vote on the final price at which tokens can be automatically redeemed against USD.

Join our social media channels:
https://t.me/issuaa_main
https://twitter.com/issuaa2
Visit our website:
https://app.issuaa.org/

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Next generation DeFi protocol for derivatives of real world and crypto assets on blockchain. derivative

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ISSUAA

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Next generation DeFi protocol for derivatives of real world and crypto assets on blockchain. derivative

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