What is CACAO?
By leveraging its native token CACAO as a settlement asset, The Maya Protocol revolutionizes the landscape by eliminating the need for numerous currency pairs. This strategic approach concentrates liquidity while bolstering economic security within the decentralized network.
The underlying token economics of the Maya Protocol are elegantly simple yet robust, serving to fortify the network's stability. The demand for CACAO is intricately tied to the network's usage dynamics: for every $1 worth of non-CACAO assets circulating on the network, a compelling incentive structure stimulates the locking of $3 worth of CACAO. This locked CACAO-to-other-assets ratio plays a pivotal role in determining the value of locked CACAO and consequently drives the demand for CACAO itself, responding dynamically to the price fluctuations of the cryptocurrencies it secures.
Through this ingenious mechanism, the Maya Protocol ensures a solid foundation of security, liquidity concentration, and economic vitality, propelling the decentralized network to new heights of success.
As the Maya Protocol's pools witness the addition of native assets, the baseline value of CACAO experiences a notable boost.
The price dynamics of CACAO are driven by two primary factors:
Deterministic Value based on Network Liquidity: The value of CACAO is determined by the liquidity present within the network. This baseline value serves as a foundational component in driving the overall price of CACAO.
Premium or Multiple of Deterministic Value: In addition to the deterministic value, the price of CACAO can also be influenced by a premium or multiple factor. This factor reflects the market's sentiment and perception of the asset, potentially causing deviations from the deterministic value.
To maintain a balanced ecosystem, the protocol incentivizes the locking of $3 worth of CACAO for every $1 of non-CACAO assets present on the network. This allocation of locked assets breaks down as follows:
Liquidity Pools: $1 worth of CACAO is locked for every $1 of non-CACAO assets in the liquidity pools.
Node Bond: An additional $2 worth of CACAO is locked for every $1 of non-CACAO assets held within the liquidity pools, contributing to the overall stability and security of the network.
This 3:1 ratio forms the baseline or deterministic value of CACAO, establishing a solid foundation for the asset's intrinsic worth and market dynamics.