How Is the Governance Token’s Supply Controlled by the Protocol?
The governance token's supply is dynamically controlled by the stablecoin protocol's algorithm. It is typically minted when the stablecoin needs to be stabilized below the peg and burned when the stablecoin is above the peg.
This dynamic supply adjustment is the core mechanism used to incentivize arbitrage and maintain the $1 value of the stablecoin.
