✨How does $PEPAY Work?
$PEPAY uses $PEPE to secure its value
Think of $PEPAY as an OHM token that is redeemable by the user FOR $PEPE and net deflationary IN $PEPE. The key difference? Unlike OHM, you can directly redeem your $PEPAY for it's backing via smart contract at any time.
When we say $PEPAY is backed, we mean actually backed - not "treasury-backed" like OHM.
Who Should Hold $PEPAY?
$PEPAY is a perfect fit for believers in the power and potential of $PEPE.
Put simply, if you hold $PEPE in your wallet for anything but short-term day-trading, you would be much better off holding $PEPAY because over time, you would find yourself with much more $PEPE when you cash out, than if you simply held $PEPE.
Essentially, $PEPAY is a leveraged long position on $PEPE with no additional downside - not dissimilar from a $PEPE bond. $PEPAY is designed to be the bank of $PEPE - $PEPAY's primary function is to help medium and long-term hodlers of $PEPE, make more $PEPE, without assuming any additional risk.
$PEPAY is also an ideal choice for those seeking to benefit from arbitrage opportunities arising from $PEPE volatility, which is best taken advantage of by attentive short-term traders. These traders can realize substantial profit from arbitraging between the $PEPAY contract and the $PEPAY LP price, while simultaneously creating additional backing value for long-term $PEPAY hodlers, in a virtuous cycle with no losers rarely seen in any assets.
$PEPAY tokenomics create a reverse-bank-run
One of the most fascinating aspects of the $PEPAY tokenomics inherited from $JAY, is that even in a worst-case scenario, $PEPAY creates a reverse-bank-run, where the person who sells last, makes the most $PEPE. Each contract burn to realize profits pays a 6% fee into the treasury, therefore s/he who sells last will make the largest profits, because they will have profited from each seller before them having increased the backing ratio by paying the 10% fee.
There are no losers with $PEPAY.
How can there be no losers?
$PEPAY creates a situation where trading is no longer strictly a PVP engagement. $PEPAY doesn't need losers to pay winners. The game is not zero-sum. All players can theoretically leave with a profit, measured in $PEPE, without requiring additional capital to continually flow-in (the tell-tale sign of a ponzi scheme.)
Consider the following sequence as an example, with an initial price of 1 $PEPAY=1 $PEPE:
User 1 purchases 10 in $PEPAY. He pays 10 in $PEPE and an additional 1 in $PEPE in fees, 0.6 of which goes to the contract treasury.
Treasury = 10.6 $PEPE.
$PEPAY circulating = 10
$PEPAY price now = 1.06 $PEPE.
User 2 purchases 20 $PEPAY, totaling 21.2 $PEPE at the updated contract price + 2.12 $PEPE in fees, of which 1.27 goes into the treasury.
Treasury = 33.07 $PEPE (21.2 + 1.27 + 10.6)
$PEPAY circulating = 30
$PEPAY price now = 1.10 $PEPE.
User 3 purchases 15 $PEPAY via a Uniswap LP to perform arbitrage. He burns the 15 $PEPAY to the contract, which is half the current circulation, to redeem half the backing, and he receives half the treasury, equaling 16.535 $PEPE. He pays a 10% tax of 1.65 $PEPE, 1 $PEPE of which goes into the treasury.
Treasury = 19.36 $PEPE (33.07 - 16.535 + 1)
$PEPAY circulating = 15
$PEPAY price now = 1.29 $PEPE.
Whether users are buying, selling, burning, or minting, $PEPAY's redeemable amount of $PEPE will ALWAYS AND ONLY GO UP.
Last updated