The LUAB tokens function as a balancing token, determined by LUA's current floor price, it serves as a necessity for minting LUA.

Since the value of LUA cannot drop below the floor, these tokens enable holders to acquire LUA at the most favorable price. Staking or other behavior rewards for LUA are distributed in the form of LUAB tokens.

This approach aims to strike a balance between two competing objectives:

  1. Provide stakers with an appealing yield.

  2. Ensure long-term sustainability of yield rates.

The minting of LUAB tokens does not adversely affect the protocol's stability, as converting LUAOP to LUA requires contributing an amount equal to the floor price to the protocol's reserves.

Consequently, the reserves continue to back the LUA tokens. The LUAB model supports sustainable yields that simultaneously benefit both the protocol and the stakers.

Last updated