The role of the governance layer is to ensure that the stablecoins are fully collateralized and their values are tracking the target sovereign currencies with low tracking error. The governance layer has access to several levers to influence and guide the stablecoins to peg.
Some of the levers are:
Risk-free interest rate (savings)
Choice of collateral
Choice of price information feed (oracle)
The model employs a dual token model where the stablecoins are soft pegged to the sovereign currencies and the governance token (BLU) is used to absorb the volatility in the system.
The BLU Token
The BLU token is the governance token in the system.
When the system is running smoothly, stablecoin minters pay stability fees towards the system. The earned stability fee is redistributed to all BLU token holders when the system repurchases BLU.
When the system incurs bad debt, from user positions that have outstanding debt after all collaterals have been seized, the debt will be paid off using minted BLU tokens.
In simple terms, the BLU tokens holder will be rewarded with the stability fee earnings accrued automatically over the long term. Similarly, they will be punished when the system is insolvent.
Where can I get BLU?
The BLU token can be purchased on the Polygon Network via the initial token sale or on decentralized exchanges like Quickswap. The BLU token will be bridged over to Ethereum network at a later stage.
1. Initial Token Sale
You may buy BLU tokens directly from the Bluejay Protocol in the initial token sale. The token sale aims to raise sufficient funds for operations and market expansion strategies.
The sale is over a 2 year period to align the community and team to the long-term sustainability and success of the protocol.
More information about the initial token sale can be found here.
2. Liquidity Mining Program
Bluejay Finance will be running a 5-year liquidity mining program to incentivize community members who are providing liquidity in new markets. BLU will be distributed on a per-block basis to community members who are:
Providing liquidity to BLU pools (ie USDC-BLU, MATIC-BLU, etc)
Providing liquidity to stablecoin pools (ie USDC-MMKT, USDC-NGNT, etc)
More information about the liquidity mining program can be found here.
3. Decentralized Exchange
BLU tokens will also be available on decentralized exchanges like Quickswap to allow holders to buy and sell easily in the secondary market.