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What Is the Primary Purpose of the Volatile Token in a Dual-Token Stablecoin System?

Acts as a shock absorber for stablecoin volatility and is used to incentivize the reduction of stablecoin supply to restore the peg.
Greeks.Live23.11.25

What Is the Primary Purpose of the Volatile Token in a Dual-Token Stablecoin System?

The volatile token serves as the stability mechanism's shock absorber and governance tool. Its primary purpose is to absorb the volatility and demand fluctuations of the stablecoin.

When the stablecoin is under pressure, the volatile token is used to incentivize burning the stablecoin, thereby restoring the peg without requiring external collateral.

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