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Range Bound Stability (RBS)
Nemesis PRO uses manual operations to carry out its Range-Bound stability (RBS) system. This system is designed to regulate market price volatility in the value of NMSP in relation to its reserve treasury assets. The initial version of this system operates on individual reserve assets independently and has been put into action to keep NMSP stable against BUSD. The Range-Bound Stability system involves the utilization of treasury reserves to control market trends and stabilize the price of NMSP. This is achieved by selling NMSP for reserves during upward market trends and buying NMSP for reserves during downward market trends. These actions result in the fluctuation of the network size to enforce stability and maintain market price equilibrium.
The Nemesis system places a high emphasis on liquidity, with a significant portion of NMSP liquidity being controlled by the protocol (See Protocol-Owned Liquidity). To maintain adequate market depth and stability in pricing, the protocol employs policies that coordinate the balance between reserves utilized for liquidity and those reserved for the Range-Bound Stability system. This, combined with the market operations carried out by RBS, ensures the maintenance of sufficient liquidity in the Nemesis system.
The specifications listed below outline the design and operation of the implemented Range-Bound Stability System, providing a concise summary of its functionality.
- 1.Maintaining a 90-day moving average price of NMSP in relation to BUSD, with the average being recalculated and updated every day.
- 2.Determine the lowest and highest possible values for the NMSP-BUSD price based on the moving average price and adjustable spread variables.
- 3.Facilitate users to bid with NMSP for BUSD reserves at the lowest range (LR) and bid with BUSD for excess NMSP reserves at the highest range (HR) within the specified capacity of the current ranges. a. The capacity of the Reserve Auction in BUSD reserves may vary and reach a maximum of 5% of the Nemesis Treasury, dependent on the depth between the ''lowest range'' and NMSP market price at that time. b. The capacity of the Auction Bonding in excess NMSP reserves may vary and reach a maximum of 10% of the Nemesis Treasury, dependent on the depth between the ''highest range'' and NMSP market price at that time. c. If the available capacity of either range is depleted, the system will not permit any additional bids until it is replenished. d. The periodicity of regeneration for each range is set to a monthly interval, ensuring that the wall has the capability to operate at its full capacity for a duration of one month.