Each OTWO token is backed by wsOHM in the treasury, which means it's price will never go below a certain amount of wsOHM. Initially the protocol will use wsOHM as our primary treasury asset but we may consider to add more assets to balance our treasury.
OTWO tokens cannot be minted or burned by anyone except the protocol, the protocol only proceeds to do so in response to the current market situation and more specifically the price. OTWO does not rebase but the protocol create a new supply by direct sales into the market and burned by direct purchases from the market allowing OTWO tokens to forever be backed by real assets in the treasury.
More simply, if OTWO token price falls below a specific amount of OHM, the protocol buys it back and burns OTWO, if OTWO token price goes above that amount of OHM the protocol mints and sells new OTWO. Which create high yield generation opportunity for investors, the protocol itself only needs a small percentage of the treasury to operate properly which mean the remaining balance can be plugged into yield aggregators and add them onto profits from buying and selling OTWO.
OTWO will be the token for O2DAO. Although we wanted to have 1 OTWO backed by 1 OHM, unfortunately OHM cannot be used cross-chain. Instead, wsOHM (wrapped sOHM) will be our choice of reserve. As of writing, 1 wsOHM ~= 28.9 OHM. In O2DAO, each OTWO will be backed by a treasury which initially comprises of wsOHM and OTWO-wsOHM LP.
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