[BIP-18] - BAB Redemption Pool

Authors: @韦恩-Wayne, @qa1q and the DEV team

BAB redemption pool is designed specifically to deal with excessive bond issue, redeem BAB with BAC. We think it is more effective and less complicate than previous proposal BIP-8 Reverse Dutch Auction.

BAB redemption pool will be open on 00:00 UTC and last for 24 hours if either of the follow ing condition is reached.

• 1st day of each month.
• Previous 24 hours TWAP BAC/DAI_price >=1.05.

After redemption pool is opened (e.g. 00:00 UTC 1st Sep), you have 24 hours until settlement (e.g. 00:00 UTC 2nd Sep) to put certain amount of BAB into redemption pool.

Once you put BAB into redemption pool, you can only wait for settlement to get BAC with certain ratio, take back your BAB is not possible.

Where do we get BAC for redemption?

• 80% of new minted BAC goes to redemption pool, the other 20% to boardroom. Details please refer to BIP-19.
• Profits from Basis ecosystem, e.g. current Basis Lending, Basis Swap and Basis Synthetic in the future.
• Certain portion of BAC Vault, details please refer to BIP-19.
• Community will have possibility to put BAC/BAB/ETH/DAI/USDT into redemption pool as donation, BAB will be burned directly, ETH/DAI/USDT will be swapped to BAC for redeem.

In order to protect the best interest of redemption pool user, we will control the redeem ratio with upper/lower limit of BAC_amount in each redemption.

• Upper BAB/BAC ratio will be 1.
• Lower BAB/BAC ratio will be:
  • BAC/DAI Price ^ 2 ( if 0.7<=BAC<1 )
  • 0.7 * BAC/DAI Price ( if BAC<0.7 )

During settlement, assume BAB_amount_redemptionpool is X and BAC_amount_redemptionpool is Y: If X>Y, BAB in redemption pool will be redeemed to BAC with ratio of Y/X. Y/X will follow the rules mentioned above. If X<=Y, BAB in redemption pool will be redeemed to BAC with ratio of 1:1, the rest Y-X BAC will be kept in redemption pool for next redemption.