Thread by @oregonblock

$Tomb is the first algorithmic stable coin that is pegged to the value of 1 $FTM.

How does @tombfinance makes it happen?

A @milesluci0 🧵

2. $Tomb maintains its peg through three different mechanisms.
- $Tomb
- $TShare
- $TBond

The interest rates of these three different mechanisms are algorithmically generated to direct liquidity as needed to maintain the peg.

3. When $Tomb is above the peg, Tomb can be converted into $TShare.

Staking TShare prints Tomb inflating it, and pushing its value back down to peg equilibrium

4. This is incentivized through a staking apr of around 600%. This interest rate is derived through an algorithm to attract a specific amount of liquidity.

5. $Tomb is only printed by $TShare when it is above the peg. If Tomb is below the peg, then users are incentivized to buy $TBonds:

A promise to the user that when Tomb goes above the peg, you can cash in on your TBond for a premium.

6. Essentially being able to get back ur Tomb at a guaranteed higher value than if it were just held on its own.

7. TBonds are how $Tomb returns to the value of 1 FTM when below the peg.

Whilst below the peg users can burn their tomb for TBonds, thus reducing the supply and deflating it.

8. T Bonds cannot be redeemed back for tomb until it gets back over the peg.

If #Tbond is redeemed in between the peg threshold of 1<TBond< 1.01. Then 1 TBond can be redeemed for 1 Tomb.

However, as soon as Tomb is above the peg, TBond can be redeemed for Tomb at a premium.

Strategy 1: If $TOMB is OVER the peg:

-Buy $TOMB and pair it with $FTM to provide liquidity
-Stake your TOMB-FTM LP in the cemetery
-Earn $TSHARE rewards

-Take your $TSHARE rewards
-Stake them in the Masonry
-Earn inflationary $TOMB rewards

-Sell half of your earned $TOMB for $FTM, and compound it back into the TOMB-FTM LP.
-Profit!

Strategy 2: If $TOMB is UNDER the peg:

-Buy TOMB and exchange it for TBOND.
-If you are LP'ing, you can break the LP to exchange $TOMB for $TBOND,
-Use the remaining $FTM to buy $TOMB to exchange for $TBOND.

Now you have a big fat bag of $TBOND, and you've also helped bring $TOMB back above peg so that the Masonry can resume printing.

-Once $TOMB is back over peg (above 1.1 TWAP) sell $TBOND for a redemption bonus.