OTOKEN Policy

The OTOKEN Policy defines the rules governing how new OTOKENs are created, redeemed, or burned. This ensures that supply adjustments are deliberate, rule based, and subject to oversight rather than arbitrary or centralized.

Key Elements

Minting & Burning Controls

Only approved AMOs can mint (create) or burn (destroy) OTOKENs. These permissions are granted via a whitelist mechanism. For instance, a DEX Liquidity Management AMO might gain permission to mint OTOKEN if certain price conditions are met, or a Collateral Management AMO might be allowed to burn OTOKEN when excess supply needs to be retracted to maintain peg stability. By limiting these actions to authorized modules, the system safeguards against malicious or accidental inflation and ensures that every token movement aligns with carefully considered policies.

Governance Driven Authorization

The power to add, remove, or modify which AMOs have mint/burn rights is controlled by the Soul Token holder, which could be a DAO or protocol team. This means the community collectively decides which strategies deserve the power to influence the OTOKEN supply. Such a mechanism ensures transparency, decentralization, and the ability to adapt as new opportunities or risks emerge.

By keeping tight control over supply, the system can respond to market conditions without succumbing to runaway inflation or arbitrary decision making. OTOKEN’s credibility as a stable, utility rich asset rests heavily on the trust engendered by these rules and their enforcement.