We are putting on a trading tournament to test the LED system and you’ve been invited to participate! The tournament will involve competing against other participants to accrue the most currency, and will help us develop LED by giving us data about how the system performs in the wild.
LED (Liquid Energy Dollar) is a synthetic asset that tracks the value of energy. It’s a collateralized stablecoin, meaning that to create $1 of LED there must be more than $1 worth of collateral sitting in a reserve.
Under normal conditions, LED is a relatively stable asset; it will usually hang around $1. However we’ve instituted a market balancing mechanism that can cause the price of LED to change based on imbalances of supply and demand. If too many people want to hold LED (as measured by the market price), an interest rate will be charged from LED holders and given to LED suppliers. This encourages more people to supply LED on the market to earn the interest rate.
If too many people supply LED and there aren’t enough holders, an interest rate will be charged to the suppliers and given to the holders. This encourages more people to hold LED to earn the interest rate.
The interest rate will show on the dashboard as the Redemption Rate.
<aside> ⚠️ For the sake of the tournament, we’ve sped up the rebalancing factor by 12x! This means we’ll be speed-running 3 months of activity in the course of a week 🚀
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The LED oracle determines a global energy price by looking at the current Bitcoin difficulty (a measure of how much work is being done to secure the Bitcoin network) as well as the current Bitcoin market price (helping to determine how valuable the reward is for mining a block). The oracle is automatically updated on an hourly basis, and the LED redemption price is calculated by the system as Deviation Factor (the accumulation of all interest rate changes on the price) multiplied by the LED Oracle Price.
The LED oracle price has historically had relatively low volatility, so you shouldn’t have to worry about it too much over the course of the tournament. Other factors such as the interest rate and market price will have a much, much greater impact on your success.
https://github.com/LiquidEnergyDollar/oracle-contracts
The winner is the trader with the most net value ****at the end of the tournament. USD will be counted 1:1 while LED will be counted at the market rate on the last day. To prevent market manipulation, we’ve randomly chosen a time in the last 24 hours of the tournament to take a snapshot of the market price of LED. Assets held in vaults will be counted, though LED debt will be deducted at the market rate.