From the very beginning of the CTPSB project, there was a market maker actif for the token that would reproduce the value of the token that is defined by the hive power on the @ctpsb account divided by the number of tokens in circulation.
In the first years the account continued to grow and when the market maker was running out of CTPSB tokens, it would purchase them from the project who would power up the according hive power. In the last two years, the tendency is a bit reversed and we have most of the time a good balance between the people who want to buy and who want to sell the token. Is this balance is maintained, the market maker manages to buffer the small diversions.
What happens when a lot of people want to sell CTPSB
This is the situation we are in at the moment. There are several people who are selling their token and getting out of hive. We feel this also with CTPSB and we see that the market maker has a disbalance with the owned CTPSB tokens growing and the hive diminishing. In order to face such situations and to provide buy orders for people who want to sell tokens, we have a rebalancing system in place. This system has kicked in last week and will continue until the balance is established again.
How does the rebalancing work?
It is triggered when the market maker has less than 15% of its fortune in the form of liquid hive. This means that 85% or more is composed of CTPSB tokens. When this happens the rebalancing starts.
In the first step, the project buys for around 200 hive from the market maker. In the second step the project starts a powerdown of 200x13 (around 2600 Hive). The market maker has now 200 hive more to buy back tokens. After 7 days, when the first power down is completed, the project burns the CTPSB tokens that it has bought from the market maker one week before.
The process is then continued week by week until the market maker has at least 15% of its fortune in the form of liquid hive.
Since with the rebalancing the number of tokens burnt and the equivalent hive power are both erradicated from the equation, the value of the CTPSB token stays unchanged. Thanks to the rebalancing, it's possible for the project to adapt to the market demand and help the market maker to provide a minimal liquidity for buy orders.
We have started a rebalancing last week and it will continue until the market maker has enough liquidity again.
The numbers of this week
| Assets | Amount | Increase over last week |
|---|---|---|
| Hive Power | 33779 | +92 |
| Tokens in circulation | 9430.4 | -2 |
| Burnt tokens | 2068 | +2 |
| Token value | 3.582 | +0.011 |
| APR | 15.4% | +0.9% |
Learn more about the CTP Swarm Booster:
A project run by @liotes