Egoras Credit (EGC)

The Egoras Credit (EGC) – As a utility token, EGC must pay the inventory fees accrued on Loans used to generate EUSD in the Egoras Protocol. Only EGC can pay these fees; when paid, the EGC is burned, removing it from the supply. If the adoption and demand for EUSD and Egoras Credit system increases, there will be additional demand for EGC so users can pay the fees. It also means the supply will decrease as EGC is burned.

How EGC Facilitates the Stability of EgorasUSD? If demand for the EUSD decreases, prices will fall on secondary markets. What happens then? Suppose the redemption price of EUSD is $1.00. If the price of EUSD on the open market is $0.98, arbitrageurs will be incentivized to buy it up and redeem it with the Egoras smart contract for $1.00 worth of EGC or eNFTs. They will continue buying in the open markets until no more money is made, which is when the market price matches the redemption price of $1.00. The same mechanism works in reverse when demand goes up.

If the price of EUSD in the open market is $1.02, arbitrageurs will be incentivized to purchase newly minted EUSD tokens for $1.00 worth of either collateral or Egoras Credit tokens (the latter only if there is an excess pool of EUSD tokens available), and immediately sell them in the open market. They’ll continue selling in the open markets until no more money is made, which is when the market price matches the purchase price of $1.00.