Genesis League USD Stablecoin (GLUSD) Token
The Genesis League USD Stablecoin (GLUSD) token is a cryptocurrency token intended to maintain a relatively stable exchange rate with the US dollar. We feel that having a native token with a relatively stable value in relation to the US dollar within the Genesis League Sports ecosystem will be a vital part of the stated goal of the platform to create a user-friendly experience for all players.
Via GLUSD, players will be able to hold and transact in a token that has a familiar and relatively stable value all over the world. This will make most monetary in-game transactions, such as buying or selling NFTs on the peer-to-peer marketplace, much easier and more convenient. The players will not have to deal with rapidly changing third-party market prices and conversion rates for their payment tokens.
The GLUSD token will have several primary uses within the GLS ecosystem:
- Buy and sell packs starting with Genesis League Goals
- Buy, sell, and rent NFTs on the Genesis League Sports Marketplace
- Pay for in-game items and transactions
The GLUSD token will attempt to maintain a stable exchange rate of 1 GLUSD per 1 USD via two relatively simple mechanisms.
Players will, at any time, be able to burn $1 worth of GLX tokens for one GLUSD token. The top-voted validators in the DPoS governance system will act as oracles and provide a price feed that will allow the system to determine the time-weighted average price of the GLX token on external markets for these conversions. Simply put, if the time-weighted average price of GLX is $0.50, users will need to burn two GLX tokens for one GLUSD token. Please note that users will receive 97.5% of the value in GLUSD as a buffer to prevent potential price manipulation exploits.
This mechanism will help ensure that the value of GLUSD tokens does not go much above the intended target of 1 USD on the various external markets due to the arbitrage opportunity it provides to token traders who would be able to burn $1 worth of GLX in exchange for greater than $1 worth of GLUSD tokens.
All products sold in the Genesis League Sports ecosystem will be available to be purchased with a fixed amount of GLUSD tokens at the rate of 1 GLUSD per 1 USD, regardless of what the exchange rate of GLUSD is on external exchanges. For example, if the external pricing of GLUSD is 1 GLUSD = $0.5 then the price of product in-game would be available at a discount.
Pricing products in GLUSD tokens will ensure that those tokens always have a specific value. As long as there is demand for the products being sold within GLS games, the GLUSD token will have value. Should the GLUSD ever be available at significantly below $1 on external markets, it will provide an arbitrage opportunity for players to purchase GLUSD on the external markets (pushing the price up).
For those familiar with the Splinterlands game, this mechanism is modeled after the Dark Energy Crystals token. We believe these two tokens will be the first examples of an exciting and innovative new type of stablecoin whose value is backed by actual products rather than other tokens/currencies or algorithms.